OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

XEly 0, 1939 

Honorable Tom L. Beauchamp 

Seoreterp of State 

hustln, Texas 

Iher slrr 

. 

ot you? lottar or 
Honorable Tom L. Beauchamp, Iday 8, 1939, Page 2 

. 

more from date of issue. For your oonvenienoe 

in determining the issue8 at hand, we em herewith handing to you a copy of the offloe memorandum oonk.aInIng the signed ruling ot Ssoretarg 

of State Jane Y. IdcCallum that suoh gas pipe 

lines are not publlo~utIlItles. Pte are also 

herewith enclosing our correspondenoe with this 

oorporntlon and Its attorneys going Into the 

faota OS the ease; when you ham oompleteb your 

research upon this question we would thank you 

t0 retW& 0~ OOr~BpOnb~00 iii43 With thb 

oorporation. , 

"We4 would themrore ~apprsolatm.your oolwida&ioJl 

t%Ud Optfd011 Upon the iOlhVing ~MstiO~l 

'Am we to ola8sIr 

under eubUirIr$on 

*. 00mputed as r0iimii:. . . .~. . .* 

On'~prll 14, 1930, Jane..Y. MaCallum, then Searotary 

or state, made the r0ii0wing dspatitmental rulingt 
aonorable Tom L. Beauchamp, Say 8, 1939, Page 3 

"There ar*> numerous deolsions of various 

courts holding oertain enterprisea to be 

publio utilltles and t!;ore are several 

statutory provIsIons deiinlng oertain b&ineose8 55 pub110 utilities, whloh are in the 

nature of mere polioe qgulations or whioh 

have to do with condemnation prooeedfnge of 

private property for publio us5 or whlah Involve the validity of a tax to support a 

pub110 see. Aa pointed out on Page 5S7 of 262 

U. S. Reporta, the Legislatars nay levy a tax 

ror any purposa In whIoh the State way~aa~. 

mob pr40tio4iiy oovora th6 ri4id or 

*Tide dapartmsnt therotors aUopt8 the qonatmotlon *hioh Is saggertetd 3.4 the opinion 0r tha ~.i: 

su~ra4~a;oOurt ot the United State* retorrad to; 

-that. !~publlo utlllty ooiporatIona*, aa used In 

Houaa Bill I.#!, lnoluda only those oorporatlona 

.rhlgh ara‘ln Saot pub110 utility oorporatlona 

. and angaeemy In bualneaa aa auoh, only 

Ii thalr aervloa or ratas are aubbjeot to regular 

.tIon by law, other than for msra purposaa of 

pOlIoa regulation, wul that any aorporation whiah 

oannot olearly astabllsh Itsolr to be withIn thI6 

olaaa will be held to oome within Paragtaph (A) 

as a private bufalneaa oorporatlon. 

"Ths rollowing olaeaea of oo,rporation .are not 

reoognized as publio utiUt+rs:....... 

"10. Gaa pipe line?. t3as pipe lines, we are 

\ 
morcble Tar L. Beauohamp, May 8, 1939, Pace 4 

advised. are not common carriers bccauso In 

practice It Is Imposelble to provide place 

of storage for gas.- 

hrtlcles 6050, 

amended, classify the 

6051, 6052, and 6053, R. C. S., 1925, 

various kind5 of business engaged in 

oduolog, transporting, Cellvering, and selling natural gas 

the public for domestic or other use, and deolares eaohto 

a -gas ut111tp-, 'public utl2.It.y" or %tIIItyw, afieoted 

th the pub110 Intarest, and aubjeot to the regulation and 

ntrol'bt the Railroad CommlaaIon. Evarp aaah gas otllltf 

requ,Jred to keep %aoka, aooounts, papers, reaorda, tiIpta, veuohers, and other data nqulrsd by the OamaIaaIon,a 

an orrlae In Tsxaa. 064 pipe lInea engfiged In produolqg, 

&Ins, transporting, delivaMng, or othsrwIae daaling~in 

.taral aa are eaah-daolared to be a publIa utlllty, a%-. 

@tad with the pub110 latareat, ax@ In nature and aooardIq 

I th6 eatablIahed method of ooaduotlng same a monopaly, and 

tblaaf in xYmp&Ot to all-their haldIngs partainIa& fo .th8 

,., 

111 bualneas and In-all ralqtlona to the publlg, and Iansprat 

t their produoing, traaaporting, maaIrlng and d.IatrIbatlag 

rotIlItlea, to the ipll,and oo 

' the Railroad CauaIaalon. "g 

late, oontrol aad aupervlalon 

Aut orltf Is also (#van tha Qam-- 

~aalon to fix, establlah, and l tioroa a reaaonabla rate whIeh 

Lpa 1Iaqa may ohargs .for gas dellrarad at tha olty gate to 

aothar dl8trIbutIng oompany or aunIoIpalIty; to Six a 

iaaonabi+zat& ror ,4as sold and delivered by pipe lIsaa og 

ther dlstrIbutIng oaaqanlaa to tha pub118 ior dcmaatla az 

ther aqe; and to-fir aad astabliah a fair and 8quItabla 

1vIaIon Oi tha prcioa@da or tha aala of lratllrdL &a8 batuaan 

hh-pgmluaIng,or transporting ampa.nIsa aad the~ooaganlaa 

latrlbutlng or aellIng It to the ultimate aonauaar. Stata 

. Fubllo ServIoe Coru&atlon.oi Texas (T. 0. A. 19SS) 88 S.'W. ; 

$1 6i7+ se& also. 6t.e f. Lone star ais Compaiy (T.-a. r-i 

955) ea s. w. (21 484. 

Ee reoagnIa@ the dootrlna oited by the Seorstarl or 

tats that a legl5latIre deolaratlon that a patilaular buaInesa ,, 

a a public utility or afreotsd with a $iublic interest la not 

eaeasarlly binding upon the ooqzt In all In5tanee8, yet auoh 

deolaratlon is entitled to e&ious oonslderation. In this 

artloular Instanoe It would aripear that the courts hav'o SOopted the leglrlatlte olaselfloatlon and treated such oorpora- 

*ions a8 It they ware in faot pub110 utilities. See also 
Zonorabte Tom L. Beauchemp, Key 8, 1939, Page 5 

Railroad Commission v. Eumble Oil end Refining Coqany (T. C. A, 

1936, :':rit gr&nted) l@l S. 'A'. (2) 614. The Supreme Court of 

Texas refused a writ of error in the Lane Star case, and it 

was finally passed upod by the Supreme Court of the United 

States In Lone Star Gas Company v. Yt:ite of TSXa8, (19X3) 304 

U. 3. 224, 53 S. Ct. Rep. 883. The Yupreme Court did not 

question the status of suah companies or the right of the state 

to regulate their rates, but the case ms reversed upon the 

grollod that the rate whioh had been sat ~88 unraa8onable, In 

that It aid not takes into .00aa0tati0n the o ver -al fiaenoe. ll 

Th$s 0atie has again been passad upon by the Court OS Clril 

Appeals in State of Texas Y. 

r0prtea. 

&me star Gee compsny, pot yet 

Th& OOUI%, In 0038piying With tha m&at0 iXQla.thO _, 

Saprome Court that It o0ntInUo With rurther prooesdlagcr not i : 

Inoonslstent with Its opinion, has rgaln Uphela the aotlon 

of-the Baflroaa aaamieslon In 8ettIog the rate;to bs ohdqed - 

Sor gem at the oity gate. 

L; It was heli In O~lf Stat.6 UtIlltler &aqany ve 

'~. State (T. C. A., 1932) 46 S, OF. (2) lOlS, that a 0ompw'-ongagea in the mamSaotw0 ana 0uppl.y 0s 100 to th6 p~bllo warn 

no6 a pub110 Utlllty wIthIn OCR tran6hIso tax stat&e, there *. 

" being no &at&r deflaing it as such, and Q0t being in faot 

iaetagaa fn that type of buslness. atag BlaIr,:in writing : 

the apInIon of.the oourt, atatsdt 

"Passing to a aonaIileratI0n di ~sUbaIvI6Ion 

(a), aupra, of the FranohIse Tax Aot of 1QW 

wo slnd that it noslther expressly nor lmpldly 

v lnoluaes or olaemifles ror taxing purposes prlvat8 oorporatlons 0ng*gea laths man&aotUra 

and sale .of 108 to the publio Ia ‘fsxas do *pub110 utility oor PatIons.' Under the Jang~age 

of 6ubalvlslon a) anl 

tlons, whloh shall $” Iao 3 

'pub110 utility oorparaUse every maoh oorporatlon engaged solely in.the buSillss8 Of & publIo 

utllitr whose rates or serrioe Is regolated, or 

aubjeot' to re@.latlon, in whole or In part, by 

law,l,are Included. It if3 BVUli?aSt flWIl this, 

language that the.La.gialature did not intend 

to inc1ua.e within t&6 statute any~ooqwratlon 

whloh'lt .had not theretofore, or might thereaft,er;,deolare to be *by law' a pub110 utility 
Vonorable Tom L. Beauohamp, May 8, 1939, Page 6 

corporation or business. The phrase 'every 

suoh oorporation* is neaessarily limited to 

*all public Utility corporations' deolared 

to be 8UCh *b-J law*. whlah means. as applied 

here. by 1 Rlslative anaotment. If the 

language Lyebe regarded as of doubtful 

meaning in this reeard, then we think that 

suoh oonstruction is manifestlv the intention 

of the Legislature iron its lone-continued 

poliop of anaoting from time to ttie deolaratory statutes, daolaring buelneswo or anterprises to ba pub110 utIlItlea, or to be affoot88 with the pub110 inttbrsst, and In subjsotlng them to soma sort o?.publIo rogdla-' 

tlon or oontrol. And aspeoIallyhasthIa 

been the praotlos of the LegIslaturcwIth~ " 

raspsot to businessas or ~aterprlrres uhIoh 

~egal'matters of astermInIng wba* brulquse 

ati publIo.utIlIty busInaasee,'ol! wh& We 

porations are pub110 utlllty~oorpo~tlons 

or of determInIng the mattsr qf what publio 

utility oorporatlons* rata8 or urrloa ara 

subjaot to regulation. It i8 w8ll 8etti0a 

that the forum Sor dsr4arIog a budnose to 

bs atteotsd with tha inablLo Interoat, and 

-iOr 8UbjQilting its FatO8'Or U3lTiOO t0 ramlatlon, is fn the first i~tanoe the Legislature, and, until the &#slatura haa 80tea, 

we do not think abrlnl8tratire ofrlolals or 

departments OS ~srnn~6 8~ ‘d'eteraine the 

questlons. 1 Thampson en Oorporatlona (3a 

m.) p. 1706.......* 
Honoreble Tom L. Beauchamp, Kay 8, 1939, Zag% 7 

This reasoning Is equally sound and is equally applicable in determining whether a corporation declared to be 

a public utility by. the Legislature should be so classified 

by the Seoretery of Stats in applyin subdfvlsion (0) of 

Art1010 7084 R. C. s., 1925, as amended. 

Mile it ls.with some reluotasoe that we disagree 

with a aontemporaneous oonstruotlon by your department, we 

think thst In the light of more reoent expressions OS the 

saa&, not availebla whan tha ruling was made, that a gas 

&s 1xns s@zpozatIon suoh as dssorlbs~ In your latter should 

bs olasslrlaa as a pabklo Utility. 

This aepurtieat Is OS tti8 oplnloa that those &as 

pips line osmpanles ileflnsa In Artlsls 6OSO B.. 0. S., 1925, 

aa publIo utllltlss ahoultl be olas8iried as pub110 utIlIty 

00rporatioa8 as the term is u86a in Art1018 m34 (b) 

1923;a~t~~0M~,proiia~, ~OUWW their bud.nsssIs 

that or a publlo utlllty. Thla rul& la, of OOurH~ 

to.rinal ~oldl .aetemIaatlon that a gas Ipe llao 

la Art1010 6080 Is'%st"In.faot a publio uti E tp and llot subAiot * reg9latIon. 

: Very truly yours . 

., 

ATTORRETWUERALOFTJU42