in effeot.
Section2 of,Article7G47b,V.C.S., defines produceras follows:
qor th8 purpose of this Act 'prodUC8r'shall mean " s Ovning,controlling,xwaging; Or leasing any gas well and/or any person who produces in any manner any gas by taking it.fromthe earth or waters in this State, .' and shall includeany person ovning any royalty or other interestin any gae 6r its value whether produced by him, or by some other person on his behalf, either by leaS8, : oontraot,or othervise." ,. ; ', -. .
Bon. Robert 9. Calvert, page 4 (R+&) .
Royalty Ownersare definedas follow:
"'Royaltyovnerstshall mean and includem owing any mineralrights under any producingleasehold within thisState, other than the working interest,which working interestis that of the person having the manage- ment end opsrationof the well."
Ccmpaniesfall squarelywithin the definitionof a producerand royalty wner under the statute. City is exemptfrom the statutebecanse not embracedwithin its terms, and Companiesare subjectto the tax be- cause et&racedwithin the terms of the statuteand Compani88have no exemption. Companieshape acquiredall the gas under the MeAllenGeneral Area and have a right under the contract,to produceit all and the oor- relative obligationto pay the tax on all that it produces. That City is the purchaserof sow of the gasproduced, in no manneralters this obliga- tion.
It is importantto~note hov City is to pay for ths gas and the amount. Itis obsewed that the contra& says: II . . ., Companiesforvdto all gas shall be the aggregate'of(1) an equal to all bssorle and landowner'sroyalty payableby Companieson the quantityof gas so' 8old end deliVeredhereunder,and (2) m m equal to all production,severance,sales, gathering,transmissionand other taxes of similar .' nature,18Vi8d and aseessedin respeot of or appli- cable to the quantityof gas so eold,enddelivered hereunder."
This is nothingmore than a measurementin money of what City rekeives from Companiesfor the privilegeof produoingend sellingall the gas which Ccdnpaniesmay sell not only to City but to othersunder long term contracts,if deeired,so long a8 it observesthe requirementsof the amount of gas to be sold and deliveredto City from the total of an gas producedfrcm the &Allen GeneralArea. I It ie apparentto us in construingthe lease and gas salesCon' tract togetherand as one instrumentthat the right to purchasegas by City is in lieu of the right to receiVe a royaltyas pesoribed in the lecrse*
This tax has been properlylaid againstCcmyanies,the prodPr" After the deliveryof the gas to City, it may use it or sell it to other8 but the taxliability of Companiesas produoerareIminsthe same.
ha8reth8Mfm8 NISpeotfullyadVi88dtbatCompani88~e m*' for the tax as the producersof the gas sold and deliVeredto City under tb oontraot. . . .
Bon. Robert S. CalPert,page 5 (tJw-68)
.~ s[IMMBRy'
A producerof gas, which is sold and delivered to a City, a municipalcorporation,under a contractwith the City, is liable for the occu- pation tax imposedby Article 70&7b, V. C. S. That a City is the purchaserof the gas, is wholly immaterial. The tax liabilityagainst the produceris the same under the contracthere involvedand under the statute. The City is not the producer;hence, it la not liable for the