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### 513

OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN

0cMI.D 0. MAN” ~nxemmv an*maL

Honorable ClintonOwalry, D~.m&,or Honorable Dlm&,or ckls UtllltisaDivision RailroadComission of Texae
Dsar Sir:

We have rsaeivr Presidentof the 80 the operationsof t to us a0 folloust i reoentdate with ou tram the Bioemm your letter

latter 0fxapW wa8 p Artlola do50 end asion annual l-0. er irtiole 6056 and me6 reaefptntuaa

t operationaai RepublloFIatural 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 Oampanpmaker 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

CompanyHonorableClinton Owslsy,Page 9

are baaed upon the readlhgea? the town bordsr mater, provided that tha lost and unaaoouuted for gas between the Sisld stationmeter (In the Saxet Field) and ths town bordermeter doas not sxoesa 10 per oent. 30 far as has bean deterElnsd by this Division,no adjustmenthae aver bean made for lost and unaooountedfor gae in exee8a of 10 per oent. .wRepubllo

Natural Gas Compan7,ownr,operates, and maintains its gas gatheringeyatem 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 referredto In this unit was aoastruotsdaubroquent to the oonatruotlon OS said road. Another portion of the gatheringa7stam of this aawn orossss Bate Highway No. 9, whichwas ooartruoted subsequentto the aonstruotion by Rspublio Natural Gas CompanyOS Its said line. "Plea8sadvise ua whether or not RepubUo Natural Gas Oompany la a public utility or utlllty within the msahlng OS ArtlaledOb0 ihso?ar aa the jurhdiotlon of the P&lrctadOcamlsslon OS Texas is oaafcrred in Aptiole 6056 and 6060.a Artlole 6060, Rsvlsad Civil Statutes of hxas, reads as Sollows

vEvery gaa utility subjaotto the pro+ialohs or this dubdlvlslonon or before the Slrst day o? January and quarterlytharaaStar, shall ill% with the Commisnlona statement,dul7 verlSled as true and oor~eoCby the prasidant,treasurer or generalmanager If a aompaay or oorporatlon, or by the owner OS one OS tha ii au individualor oo-partnership, shoringths gross reoaiptsOS suah utility Surtho quarternext praoedingor for suah portion OS said quarterly period a8 such utilitymap 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 thlrEonorable Clinton Cwsley,Rage 3

State during said quarter.” This hrtiolewaa 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 RevlaedCivil Statutes 0S 1923, exaept iaaoiaras It lmpoasa a lloenae See or tar a? one-fourthof 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 provlaionaOS 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 operationsof the RepublloNatural. Catv Companybring 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 'publlantlllty* or lutlllty,l aa used in thia 

### l

ubdlvialan, mean8 and lnaludeaperaonr,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 

### 0sbualneaar
".
. . "2. Cwnlng or operatingor managing a pipe line Sor the transportation or oarrlageOS netural &as, whether for vublio hire orn~tiai;e",F part of the right OS nay SQX raid 11 h aoquired or may hereaSterbe 

### l oqulred by th8 8xeralee or the right oS eminentdomain; or if aald

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

utilltyg inaludihgalso a09 natural gas utility authorizedby law to exerolsa the right of bmlnent dceoain.

" (Emphasisours)
You state in your letter that the RepublicI&$- ural Gas Company 0~18, operatesand 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 subsequentto ths oonstruotionof the mad. Another unit aronses a Stats highwaywhioh was oonstruatedsubsequentto the oonrtruotion or ths pipe liner

From the underaoored part of the abow q~uotsd statute,It is apparent that thass operationsbring 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 Williamsv. Stats, 109 9. W. (8d) 489, lnvolvodthe oilen8e of unlawfullytapping a pipe line under xrtlole llllb OS Vernon*8 Penal Cods. 310 Court of Criminal &3Xd8 had ths iollowiagto 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 oonveyedSrom one plaae to another.* Without doubt this dofinltlon vmulild Cover tha gathering89Sta& -ever, we are oonvinoadfrom ths very wortllng 

### or the 8tatuto itseli that it IIS the lagi8lativa intant that gatherIn&srystem pipe lineswere to be lnsludad. 'Ihe statuteprovides speolrioallp vwhotherror publiahln or not.” Thi8 olssrly tidloaterr that private pipe llms are included if the Other oondition8 are prasont. lhe ilutaut 8ituationis olaarlydirrtingulahabla 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 solleatfngan intangibletax lmposad by virtue oS Article 7105, Vernon18 AnnotatedOlvil Statutes. In oonneotionwith its rsSiner9 the oompanyhad a pipe lineRonorablo Olinton 0~81ey, Page 5

whioh it used axolusivel9to transport 011 that It purchased Srom vsriousproducersto the reiinery. The only questionto bn deoidedwas 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, turnpikeor 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 aaso6lationdo1 ne88 OS the 8ame oharaoterIn this addition to the ad valorem tuw on tan&ble properties whioh am or may bs imposed &on them rsspeotfvely,

by law, shallp&y an annual tu to the State, beglnniq with the rir8t day OS January OS each year on their Intangibleassats 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 oompanyand a donwon aarrler ql%;‘pipa line oampanywould oarry on the traxwportation Of oil a8 a bu8ins88and prssumptivalpSnr hlrs that,tho transportation OS its own oil by the ooapsgt~ its refineryWa8 not bUsine8s of the same oharaoter. , the oompanywas 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 businesswithin the State and that businesswould 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 preiwmptfvelySor hire.

. .. IO ths u8b it made oS its gathering system the raSinsry in no senseHtmorabla GXinton G~nley,Pac?e 5

of the word wa8 doing the 'sameoharaoterOS bU8ineSS ’ as that referred to by suoh language in Art. 7105.

. . * This argumentdoea not apply to the presrnt situationat all 8ihoe Seotione or iirtiole 6050 orpress19 provides vwhother**ior** pub110 hire or not," which aleer19 lndloatesthat privatepipe lines am to be lnoludod within the terns 0r uld seot%on.

'jze quote SurtherSrom the opinion In the ColTen ease: "Further, wherever the queltlonor purely $rlvate pipe lineo, limited In use to reSInerie of their ownere,have been **dealt** with by legirlatlon, auoh pipe line8 have been eroeptedrrom the operationoS the law in it8 primarypurposr and objeat. In other wWrQ8, the legislationis 8pecrifio

that 8uoh privatepipe lineswere never inoluded in it8 ten&m. Evidentlythe Leginlature had in mind krte. 6018 and 1503 when it amendedArt. TlO5.

. .* Suoh le not the oaae here. Instead OS eraoptillg privatepipe l%m8, the bgi8lature by insorting -ether Sor public hire or not" &early lndioatedthat 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. RailroadOommlssion0r Taxas, et al l..SS Tax. lP5, 155 S. t?.(nd) 9, a8 controllingor even appiloableto the situationet hand. We quotefrom 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 thereoimust 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 transportsuch aas On, Qvsr. or aoross the publio highWs98OS thi8 Stats, emHonorsblaUinP;on Ov6lep,Pe@e 7

axnrolse the right of eminentQwfaln 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 ?ol1a01aThe Gosfabeion may requln o? rll persons or wrporetiesa opcrrating, owning OF oantrcbllbg euehtr a pipe liner ewora report8of 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 reportsreqtitedby the ba~ir+Nkil Oapaat86iOn under &tiole &X%3, 'i. C. P. Vl?D JUL 11, 19 1

A -

ATTORNEY GENERAL iwE ILli5