OFFICE OF THE ATI’ORNEY GENERAL OF - 

AUSTIN 

or. Gw J. Gtraoar, Director 

Qao Utila.i.ee Division 

Bailroad Conmloeion or Terss 

MrJtsn, %aa8 

Dear sir: 

, 

b yootlr iettcrr 0r 

oat0 your requeet ror 

Texas 

eale to the CLtp 0r Palaoloe, 

should the City 0r Palaaloe aaqulre a 

dfetr~butlon syetem to eerve itia rerlidimte. 

“The above deskbed bperations were begun 

about Deosmber Xl, 1940, an8 rrlnae that time 

several bemade have been made ot Paltef Oil 

aa G.56 C0111pan~ to file with the Raimaa Commlsslon or Texae the quarterly reports required 

ot gae pipe llno operators by article 6080, Beylfied Cltil Dtatutea, 1985. 
t I&. Gue J. Strauee, page Z 

! ..' 

". 

.c Pi;.> 

“The Railroad Codraion or Rxaa haa pre- 

: roribea a form o? annual report for suoh oparatwa, 

a8 provided ror in Artiole 6056, liwised Civil 

Statuter, 1926, ma d6Wna8 hate been made of - 

thi8 oompany to rii6 suab anaaal report8 rtth 

the Gow&3e~00. 

Vhe C0mpan.J ooatenao that it i8 not a utlllt~ 

and that It 18 beyond the power or tbm Leglrlatare 

0r Texar to olaerlry it aa rush; aad it haa, theretore, reXuse to ffle the report8 requfred by drtiole 6060 and the order of th8 .CoPniaaioa 6ntcrea 

und& Article 6056, It baa ale0 refueed to per 

the &rose reoelpta tax68 $evled by article 6060. "* ** 

You pmpouad the question: 

"'Plea86 adds6 u8 at pur earliest oonveniencs 

(1) whether or not it 18 your opinion that Paltsr 

Oil ah6 Oar company is a gai utility a.8 defined 

by Artiale 6060, (fi) ii it i8 anbject to t&e report8 tuia tare8 preecrlbe(l by Artlola 6060, et16 (3) 

ha8 the CoarnlSEiiOn authori.ty to require the Oompany 

to rile the imaual raport ptisori,bea by the COIDIP~~- 

sion under Artiole 60567" 

We have asoertalaed from the Searetary of .State that 

Paltes 011 an6 Oa8 CO~QM is a Texas oorporatioa, bsvlag aa its 

purpoose. 0hn8e "to ertab J 8b Ma Mblt.dQ an oil bWhae88 with 

authority to oontraot ior the lease and purohaae ot the right 

to prorpeot ror; develop aad.we aoal and other mlnaral8, petroloam -awl -8; also the right to erect, bail4 and ovm all avowaary oil take 

the basine88 o 8 

oare ~aad gipse neceaaary for tba operation of 

the aaw. Subdiriafon 37 0r mtiole 1302, 

Veraon*s Annotated Civil Statutes. 

a06 6060, V. 

The pertlneat etatrrtes ore iirtlales 6050, SO66 

A.C.S., WhiOh are as rOilOW8: 
“Art. 6050. Olaoaiflaartian 

*The tean *gu8 utility* an4 ‘publio utilltp’ 

or futility,’ au uaeC it3 t&is subdirfrion, waw 

anb inclubem persoda, eompaaies anb private uorporetfoas, their lcseeee, truatecrs, 3na reoelvers, 

owaing, tmm.ging, oparating, le3aing or oontrolling 

within tiia t;tate cony wells, pi;le lime, plant, 

property, equipsent, Snoilitg, fronohioe, license 

or pernlt ror sithsr one or nkore of the following 

kind6 or ~wlnesat 

uaaa 

. 

‘* Owning or operating or managing a pips . 

line for the treasportution or oarrfage of natural 

ga8, whether SOT pub110 hire or not, if any pax3 

of the right of way for said 111~ ha8 been aaquired, 

or m4 hereefter be aoquirea by the exerolae or the 

d&it 0r eminent a0iianl or If e+fU line or any part 

thereor ie la14 upon, over or under anp publl~ me4 

or highway of thla State, or street or alley of any 

muniolpallty, or the right of way of any railroad 

or other public utility; lnclwiing also anf natural 

-8 u%ilit~ authorized by llzw to sxeiciae the right 

0r eminent 4om~1n. 

(1st * *s 

*Art. 6056. Operator's reports 

"The Coti8eion may require of all persona 

or oorporatfons opera.t;lng, owning 0s contmlliag 

auoh gar.pipe llnee auorn reporta of the total 

qunntitfes 0r gae dietrOuted by suah pipe line8 

and of that held by them in storage; an4 aleo of 

their aouroe OS oupply, the awabcr of well8 fcon 

which they draw their eupply, the an&at of preeawe malntaineb, a.124 the mount end oharaoter and 

de6OriptiOri 0r the e,quipaent employed, and rue& 

other matters pertaining to the butdneffr af the 

Commisalon may seem pertinent.W 
%r. Qua J. istrausa, page 4 

I 

*Art. 6060. ut 1llt.p t&X 

"Xver7 gas utility subjeot to ths lffovlslonU 

or this subdlrlsion oa or ber0re the first day of 

'~JanaQry and quarterly thereafter, shall file with 

the Qo;rmission aststsaent, duly verified ua true 

and oorrsot by the president, troaeurer or general 

manager if a oox~j~~ny or corporntion. or by ,the owner 

or one oi them if an individual or co-partnership, 

showing the gross rsoelpta 0r such utility r0r the 

quarter next preceding or for suoh portion of edd 

quarterly period as such utility mey hsvs been oonduotlng any busl~eso , and at such tirzer shall pay 

i.nto the State Treasury at Austin a scra equal to 

one-fourth of one $er oeLt of the gross lnco:m re- . 

oelv.rsd f om.all buelnoss done by it within t&la 

Stata.du 1Er ng said quarter." 

In pu Opinion MO. O-352!4a, the orlglnal~of whloh 

you huve in your,.b 

f 

<loo, we had before us the puentlon of whsther the hspu'blld atural gas Company, organlsed under ths sams 

subdlvislon, war rspulrsd to rii6 the report8 and pay the taxe8 

sought to be required in the instant ease. 

ke thera held that t& Bepubllo Patltral. @as Cornp&.war not liable for the gro8s reoelpt6 tnx ee providad in 

Article 6050, supra. &oh holding was predloated upon tha 

proposition that the co 

of gming or owrating or 

transportntion or oarria 

ale dOO#)t that the transportation of natwal gas was but inoldsntal to the erooutlon of its 

athad gas produolng btMnes8 under g 

urposr of opsratlng an 011 

ubdlvlsion 97 of Artlols 

lSOE, B.A.O.S. 

The faots upon whloh the Eepubllc o?inlon was 

written were8 

The oompany owned a number of gas wells In the 

Saxet Field, lueoea County, Texas; that it had pipe lines from 

its wells to (I central point on it8 own lease, where the gas 

isrola e.hd~dellvered to the City or Oorpus Christ1 through 

a line omed by that ofty; its lines oonetituteda gathering 

system on its own leases which brought t)le nns to a central 

point l'or sale and delivery. 
h4r. Gus S. i3trauas, page b ’ _~ f lt3f-3 

In the instant aase, Palter Oil and &IS Corapanp 

18 not fsllfng gaa whioh it is authorized by its oharter to 

prodtaoei 

porting 

It is purohaslng gas rroa other produosrs and transit through its cm lines iOr the purposs Of rs8sll.l~ 

said gas to ths Units6 Stat88 Omernmsnt. Ws do mt pass upon 

the qwetfon of the right of Palter 011 and Oas Compa;r urndsr 

its ohartex to purohase gas for the purpose of resale. Bufrios 

it to my that by rirtua of its doing 80, it has, in our optaion, oonetltuted itself l gas utility within tka plain language 

of A~tlole 6060, eupra, and is repulred to file the reports 

sad pan ths taxes pruvidsd in Artlolss 6OS6 and 6060. 

) _ Lloyd ArmstfOI1(; 

Assistant