. . . . 

513 

OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

0cMI.D 0. MAN” 

~nxemmv an*maL 

Honorable Honorable Clinton Owalry, Dlm&,or D~.m&,or 

ckls Utllltisa Division 

Railroad Comission of Texae 

Dsar Sir: 

We have rsaeivr 

President of the 80 

the operations of t 

to us a0 folloust 

i reoent date with 

ou tram the Bioemm your letter 

latter 0fxapW wa8 

p Artlola do50 end 

asion annual l-0. 

er irtiole 6056 and 

me6 reaefptn tuaa 

t operationa ai Republlo FIatural 

briefly outlined In their letter 

4 

dated February S4, 1941 a 

are enolosing. In l ddltjon to / 

ained in auoh letter, you am adublia Ratural @aa Oampanp maker 

as under oontraat to the Oity oi Oorptaa 

Ohrleti, Tours, tram the Sax&. baa Field in Nuooes 

county. The Oitp of Qorpue ~Obrlstl in the owner 

of the gas pipe lins, rour and one-halt allwu 

In length, fmm said field to the town border 

station of the City of Corpus Ohrirrtl, but paymenta of gas to the I?epublio Natusol Gaas Company 
Honorable Clinton Owslsy, Page 9 

are baaed upon the readlhge a? the town bordsr 

mater, provided that tha lost and unaaoouuted 

for gas between the Sisld station meter (In the 

Saxet Field) and ths town border meter doas not 

sxoesa 10 per oent. 30 far as has bean deterElnsd by this Division, no adjustment hae aver 

bean made for lost and unaooounted for gae in 

exee8a of 10 per oent. 

.wRepubllo Natural Gas Compan7,ownr, operates, and maintains its gas gathering eyatem in 

Nueoes Count7, oao unit o? whioh orossee a pub110 road in satd oounty at a point between lta 

wel.b~ end the plaoa OS dollvory to the pipe linr 

or the City or Corpus Ohrirti. Ths pipe llns 

referred to In this unit was aoastruotsd aubroquent to the oonatruotlon OS said road. Another 

portion of the gathering a7stam of this aawn 

orossss Bate Highway No. 9, which was ooartruoted 

subsequent to the aonstruotion by Rspublio Natural Gas Company OS Its said line. 

"Plea8s advise ua whether or not RepubUo 

Natural Gas Oompany la a public utility or utlllty within the msahlng OS Artlale dOb0 ihso?ar 

aa the jurhdiotlon of the P&lrctad Ocamlsslon 

OS Texas is oaafcrred in Aptiole 6056 and 6060.a 

Artlole 6060, Rsvlsad Civil Statutes of hxas, reads 

as Sollows 

vEvery gaa utility subjaot to the pro+ialohs or this dubdlvlslon on or before the Slrst 

day o? January and quarterly tharaaStar, shall 

ill% with the Commisnlon a statement, dul7 verlSled as true and oor~eoC by the prasidant, treasurer or general manager If a aompaay or oorporatlon, or by the owner OS one OS tha ii au individual or oo-partnership, shoring ths gross 

reoaipts OS suah utility Surtho quarter next 

praoeding or for suah portion OS said quarterly 

period a8 such utility map have been aonduotlug 

any bumlmss, and at suoh t&ma shall pay lnta 

the State Tmasury.at Austin a sum e ual 

Sourth of one par oent OS the groae P 

to ohsnoome reoalved Szwn all businooa done by It within thlr 
Eonorable Clinton Cwsley, Rage 3 

State during said quarter.” 

This hrtiole waa repealed la part by Seotion 10 

oi Rouse Dill No. 547, of the Forty-aeoond Leglelature (Acts 

1931, 42nd Leg., Regular Session, Ch. 73, p. 111). Seotlon 

lo or said bill provideal 

That Artiole 6000 of the Revlaed Civil 

Statutes 0S 1923, exaept iaaoiar as It lmpoasa 

a lloenae See or tar a? one-fourth of one per 

oent agalnat person8 owning, 0 orating, 

f: 

or menaging pipe lines, as yrovlded n Seotlon 2 of 

Article 6030, is hereby repealed and raid fund 

shall be used for eniorolng the provlaiona OS 

Artlolee 6050 to 6066, lnalua1ve.v 

Therefore, aa Artlole 6060, aupra, aa smended, 

applies only to thoee pornona owning, operating, or wing 

pipe linea as provided in Ssotlon 2 OS Artlole 6OSC, we must 

now detennlne whether the operations of the Republlo Natural. 

Catv Company bring It within the pr0~1810n8 of ,SjaOtlOa 8 O? 

Artiols 6050. 

Seotlon E OS Artlale 6060, aupra, reads aa SoUowal 

the term *gas utlllty* and 'publla ntlllty* or lutlllty,l aa used in thia l ubdlvialan, 

mean8 and lnaludea peraonr, oompanlea and prlrate corporationa, their leeaeea, truateea, and 

reoelvera, owning, managing, operating, leasing 

or aontrolling within this abate any wella, pipe 

linea, plant, property, equipment, Saoility, 

Sranohlae, lloenae, or permit for either one 

or more 0s the r0iiwhg kladr 0s bualneaar 

". . . 

"2. Cwnlng or operating or managing a pipe 

line Sor the transportation or oarrlage OS netural &as, whether for vublio hire orn~tiai;e",F 

part of the right OS nay SQX raid 11 h 

aoquired or may hereaSter be l oqulred by th8 8xeralee or the right oS eminent domain; or if aald 

, 

right of way of any railroad or other ]jublio 
Honorable Clinton Owsley, "age 4 

utilltyg inaludihg also a09 natural gas utility 

authorized by law to exerolsa the right of bmlnent d ceoain. " (Emphasis ours) 

You state in your letter that the Republic I&$- 

ural Gas Company 0~18, operates and maintains Its pipe line 

gatherl~ system, one unit OS whioh orossss a puhlio road 

in Nueoeo County at a point between its wells and the place 

or delivery on It8 lease to the pipe line or the City or 

Corpus Christl. This unit was oonstrwtsd subsequent to 

ths oonstruotion of the mad. Another unit aronses a Stats 

highway whioh was oonstruated subsequent to the oonrtruotion 

or ths pipe liner 

From the underaoored part of the abow q~uotsd 

statute, It is apparent that thass operations bring tha 

campan wlthln the tsrms OS Sootion 8 i.S the gathering 

sy8tem 28 a pipe line as used in ma motion. 

The oa8e of Williams v. Stats, 109 9. W. (8d) 489, 

lnvolvod the oilen8e of unlawfully tapping a pipe line under 

xrtlole llllb OS Vernon*8 Penal Cods. 310 Court of Criminal 

&3Xd8 had ths iollowiag to 8a9 of the term pipe liner 

'1. . . The term pipe llns ha8 a ~6110 

under8tood meaning and iS oumodly under8taod 

a8 a mOU18 by whloh water, ga6, 011, or athor 

liquld8 am oonveyed Srom one plaae to another.* 

Without doubt this dofinltlon vmulild Cover tha 

gathering 89Sta& -ever, we are oonvinoad from ths very 

wortllng or the 8tatuto itseli that it IIS the lagi8lativa 

intant that gatherIn& srystem pipe lines were to be lnsludad. 

'Ihe statute provides speolrioallp vwhother ror publia hln 

or not.” Thi8 olssrly tidloaterr that private pipe llms are 

included if the Other oondition8 are prasont. 

lhe ilutaut 8ituation is olaarly dirrtingulahabla 

rrox that involvad in the oese or Col-Ik~sx!:ReSlnlng Co. v. 

Hart, et al., 14,4 S. Y. ted) 909 (W.E. Rer.). In that oase 

the ooapeny sought an injunotion against oertaln oSrfoial8 

to re8train thsm frost solleatfng an intangible tax lmposad 

by virtue oS Article 7105, Vernon18 Annotated Olvil Statutes. 

In oonneotion with its rsSiner9 the oompany had a pipe line 
Ronorablo Olinton 0~81ey, Page 5 

whioh it used axolusivel9 to transport 011 that It purchased Srom vsrious producers to the reiinery. The only 

question to bn deoided was whsther Artiols 7105 applied 

to thie type 0r pipe line. 

&tiOlO 9105 mad8 in part %8 fO11m8t 

YEaoh inoorporated railroad oompany, ferry 

company, bridge oompany, turnpike or toll oompany, oil PIPei line ooplpan9. and sll oommon 

Oarder PiRa line OOmDadeS Of every charaoter 

whatsooever, engaged in tha transportation oS 

011, doing burrlne8s wholly or in part within 

this State, whether inoorporatsd tier tha laws 

OS this State, or 68 any other State 

or SorelRn oountrs. and every other I 

territory, 

nUlr1dua.l. 

company,-oorporaticjn or aaso6lation do1 

ne88 OS the 8ame oharaoter In this 

addition to the ad valorem tuw on tan&ble 

properties whioh am or may bs imposed &on them 

rsspeotfvely, by law, shall p&y an annual tu 

to the State, beglnniq with the rir8t day OS 

January OS each year on their Intangible assats 

and property, . . . “[%pkm8iB OUr8) 

The oourt found thst tha oos~pany was neither an 

incorporated oil pipa line oclapany nor a common oarrier 011 

pips line oompany, atad that, theretora, Sor tha tax to be 

proper the oompany would have to be Voing businssr oS tha 

satm oharaoter." The oourt held slnoe an oll pipa line 

oompany and a donwon aarrler ql%;‘pipa line oampany would 

oarry on the traxwportation Of oil a8 a bu8ins88 and prssumptivalp Snr hlrs that,tho transportation OS its own oil 

by the ooapsgt~ its refineryWa8 not bUsine8s of the same 

oharaoter. , the oompany was not liable foor the tax. 

Ye quote ffora th3 OPbiOn Of ths OOIWt SS fOuOW8: 

". . . In the Stret plaoe, evsry such 'Individual, oorporation,* etc., would have to be 

engage4 in business within the State and that 

business would have to bs oS t&s sums ohsraoter as thet being done by the incorporated pipe 

line oampany, oarrisr, etc., that is, engaged 

in the transporation OS oil a8 a busllurss, and 

preiwmptfvely Sor hire. . . . IO ths u8b it made 

oS its gathering system the raSinsry in no sense 
Htmorabla GXinton G~nley, Pac?e 5 

of the word wa8 doing the 'same oharaoter OS 

bU8ineSS ’ as that referred to by suoh language 

in Art. 7105. . . * 

This argument doea not apply to the presrnt 

situation at all 8ihoe Seotion e or iirtiole 6050 orpress19 provides vwhother ior pub110 hire or not," which aleer19 lndloates that private pipe lines am to be lnoludod 

within the terns 0r uld seot%on. 

'jze quote Surther Srom the opinion In the ColTen ease: 

"Further, wherever the queltlon or purely 

$rlvate pipe lineo, limited In use to reSInerie 

of their ownere, have been dealt with by legirlatlon, auoh pipe line8 have been eroepted rrom 

the operation oS the law in it8 primary purposr 

and objeat. In other wWrQ8, the legislation is 

8pecrifio that 8uoh private pipe lines were never 

inoluded in it8 ten&m. Evidently the Leginlature had in mind krte. 6018 and 1503 when it 

amended Art. TlO5. . .* 

Suoh le not the oaae here. Instead OS eraoptillg 

private pipe l%m8, the bgi8lature by insorting -ether 

Sor public hire or not" &early lndioated that prlvat8 pipe 

line8 were to bs inoluded. 

be deem it proper to ad4 atthi8 point that we 

do not regard the oa8e OS Humble 011 & +?aIAiDg Company, 

et el v. Railroad Oommlssion 0r Taxas, et al l..SS Tax. lP5, 

155 S. t?. (nd) 9, a8 controlling or even appiloable to the 

situation et hand. We quote from the oplnlon OS the oourt 

as rO11OW8t 

” . . . In other words, Sor this order to 

be surtainsd, it must be because o&e? &as utllit9 8tatUti6 &UthOdSS the OOmillI9iOn t0 fir 

the prioe at whioh s mers produoer thereoi must 

sell his produot to a publio gas utility, even 

though suoh produot is sold by the produeer at 

the point or origin, and even thou& suah producer doe8 not transport such aas On, Qvsr. or 

aoross the publio highWs98 OS thi8 Stats, em 
Honorsbla UinP;on Ov6lep, Pe@e 7 

axnrolse the right of eminent Qwfaln ia regard 

thereto, or sell ths ema, or offer it fm aale, 

to the publfo germrally; but merely sells, under 

eontraut, to on6 purohesmr, who ie a pub1.h gas 

uti1:ty. . .- (kLpheeie ours) 

Thus, it &e soon that the oourt was dealllrg with 

the j~l8dlutl@n af thm Ullroed Coar.lesion to fir ret88 

where the gee wee not truaeported ,,%m, over, or &omee 

the pub118 hi,#mye of tbie Wets. n Yueh am not tha iaote 

he~re. 

It toll.cme irbm what we hmr said tkm omratioae 

or the :?epublia Natural Oar t?wgmny bring ft within the provisions ot Eeotion 8 of 4+fele 0080. Ihe ooprpanlr 18, thereftxce, lleble for the tax Sapwed by AFolale 6060. 

Article 6086, F%evilwa CiVll Btac~tse oi Texar, rea48 

88 ?ol1a01 

aThe Gosfabeion may requln o? rll persons 

or wrporetiesa opcrrating, owning OF oantrcbllbg 

eueh 

tr 

a pipe liner ewora report8 of the tatal 

quua tfee ot (o&a dirtributsd bg swh 9%9e llrme 

en6 6f the h614 by them in ,tcmge, an4 il8v ai 

their eoum* of aqtply, the nwbrr of aella imm 

whioh they draw tholr upply, the Mmnt af preesure nwdntdnwl, end th8 amount anb bher8~tbr 

end deeorlptfon of the l qufpilunt emplosed, and 

awh oc&er ~ttaxs pcr8alnlag fo the bumins 

se the Gc6sai88lOn uy aem prtlmnt** 

thasr this statute the w*paay mwt al8o meke the 

annual reports required~ by the C"awledM. 

15 tirw of the fongdtg it is the oone%dared oglnion of thl6 departmeat that tb Republia H$wel Oar @aqmaY 

must pay the tax irqpoeed by Astlole 6060 * c. s., an4 must 

file the mumit reports reqtited by the ba~ir+Nkil Oapaat86iOn 

under &tiole &X%3, 'i. C. P. 

Vl?D JUL 11, 19 1 

A - 

ATTORNEY GENERAL 

iwE ILli5