Court Opinion

ID: 4142839
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:26:33.682784+00
Date Added: 2024-06-11T08:45:40.287389
License: Public Domain

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                                                                                      513

                    OFFICE OF THE ATTORNEY GENERAL         OF TEXAS
                                     AUSTIN

0cMI.D  0. MAN”
 ~nxemmv an*maL

             Honorable Clinton Owalry, Dlm&,or
             Honorable                 D~.m&,or
             cklsUtllltisa Division
             Railroad Comission of Texae
             Dsar Sir:

                         We have rsaeivr                i reoent date with
                                                        ou tram the Bioe-
             President of the 80
             the operations of t                           mm your letter
             to us a0 folloust

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

                                  t operationa ai Republlo FIatural 4
                                  briefly outlined In their letter
                                    dated February S4, 1941 a
                                   are enolosing. In l  ddltjon to /
                                ained in auoh letter, you am ad-
                                ublia 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 ~Obrlstlin 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 pay-
                  menta of gas to the I?epublioNatusol GaasCompany
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 deter-
     Elnsd by this Division, no adjustmenthae aver
     bean made for lost and unaooountedfor gae in
     exee8a of 10 per oent.
          .wRepublloNatural Gas Compan7,ownr,oper-
     ates, and maintains its gas gathering eyatem in
     Nueoes Count7, oao unit o? whioh orossee a pub-
     110 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 aoastruotsdaubro-
     quent to the oonatruotlonOS said road. Another
     portion of the gathering a7stam of this aawn
     orossss Bate Highway No. 9, which was ooartruoted
     subsequentto the aonstruotionby Rspublio Nat-
     ural Gas Company OS Its said line.
          "Plea8s advise ua whether or not RepubUo
     Natural  Gas Oompany la a public utility or utll-
     lty 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+i-
    alohs or this dubdlvlslonon or before the Slrst
    day o? January and quarterly tharaaStar,shall
    ill% with the Commisnlon a statement,dul7 verl-
    Sled as true and oor~eoC by the prasidant, treas-
    urer or general manager If a aompaay or oorpora-
    tlon, or by the owner OS one OS tha ii au in-
    dividual 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 to ohs-
    Sourth of one par oent OS the groae Pnoome re-
    oalved 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-aeoondLeglelature (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-fourthof one per
    oent agalnat person8 owning, 0 orating, or men-
    aging pipe lines, as yrovlded f: 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 operationsof the Republlo Natural.
CatvCompany bring It within the pr0~1810n8 of ,SjaOtlOa8 O?
Artiols 6050.
             Seotlon E OS Artlale 6060, aupra, reads aa SoUowal
          the term *gas utlllty* and 'publla ntll-
    lty* or lutlllty,laa used in thia l  ubdlvialan,
    mean8 and lnaludea peraonr, oompanlea and prl-
    rate corporationa,their leeaeea, truateea,and
    reoelvera,owning, managing, operating,leasing
    or aontrollingwithin 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 transportationor oarrlage OS net-
    ural &as, whether for vublio hire orn~tiai;e",F
    part of the right OS nay SQX raid 11   h
    aoquired or may hereaSter be loqulred by th8 8x-
    eralee 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 bm-
     lnent dceoain.
                  " (Emphasisours)
          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 subsequentto
ths oonstruotion of the mad. Another unit   aronses a Stats
highway whioh was oonstruatedsubsequentto the oonrtruotion
or ths pipe liner
          From the underaooredpart of the abow q~uotsd
statute, It is apparent that thass operationsbring tha
campan wlthln the tsrms OS Sootion 8 i.Sthe gathering
sy8tem 28 a pipe line as used in ma motion.
          The oa8e of Williams v. Stats, 109 9. W. (8d) 489,
lnvolvodthe 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
     under8toodmeaning 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 dofinltlonvmulild    Cover tha
gathering 89Sta& -ever, we are oonvinoad from ths very
wortllng or the 8tatuto itseli that   it IIS   the lagi8lativa
intant that gatherIn& srystempipe lines were to be lnsludad.
'Ihestatute provides speolrioallpvwhother ror publia hln
or not.”   Thi8 olssrly tidloaterr  that private   pipe llms are
included if the Other oondition8are prasont.
          lhe ilutaut 8ituationis olaarly dirrtingulahabla
rrox that involvad in the oese or Col-Ik~sx!:ReSlnlng
                                                   Co. v.
Hart, et al., 14,4S. Y. ted) 909 (W.E. Rer.). In that oase
the ooapeny sought an injunotionagainst oertaln oSrfoial8
to re8train thsm frostsolleatfng an intangible tax lmposad
by virtue oS Article 7105, Vernon18 Annotated Olvil Statutes.
In oonneotionwith its rsSiner9 the oompany had a pipe line
Ronorablo      Olinton     0~81ey,   Page   5

whioh it used axolusivel9 to transport 011 that It pur-
chased Srom vsrious producersto 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 inoorporatedrailroad oompany, ferry
      company, bridge oompany, turnpikeor toll oom-
      pany, oil PIPeiline ooplpan9.   and sll oommon
      Oarder PiRa line OOmDadeS Of every charaoter
      whatsooever,  engaged in tha transportationoS
      011, doing burrlne8s  wholly or in part within
      this State, whether inoorporatsdtier tha laws
      OS this State, or 68 any other State territory,
      or SorelRn oountrs. and every other InUlr1dua.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 Intangibleassats
      and property,   . . .“[%pkm8iB   OUr8)

               The oourt    found thst tha oos~panywas neither an
incorporated      oil    pipa line oclapanynor 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%;‘pipaline oampany would
oarry on the traxwportationOf oil a8 a bu8ins88 and prs-
sumptivalpSnr hlrs that,tho transportationOS its own oil
by the ooapsgt~ its refineryWa8    not bUsine8s    of the same
oharaoter.       , the oompany was not liable   foor the tax.
Ye quote fforath3 OPbiOn Of ths OOIWt SS fOuOW8:
           ". . . In the Stret plaoe, evsry such 'In-
      dividual, oorporation,*etc., would have to be
      engage4 in business within the State and that
      business would have to bs oS t&s sums ohsrao-
      ter as thet being done by the incorporatedpipe
      line oampany, oarrisr, etc., that is, engaged
      in the transporationOS oil a8 a busllurss, and
      preiwmptfvelySor hire. . .. IO ths u8b it made
      oS its gathering system the raSinsry in no sense
Htmorabla   GXinton G~nley, Pac?e5

      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 iirtiole6050 orpress-
19 provides vwhother ior pub110 hire or not," which aleer-
19 lndloates that private pipe lines am to be lnoludod
within the terns 0r uld seot%on.
            'jze
               quote Surther Srom the opinion In the Col-
Ten ease:
          "Further,wherever the queltlon or purely
     $rlvate pipe lineo, limited In use to reSInerie
     of their ownere, have been dealt with by legir-
     latlon, auoh pipe line8 have been eroepted rrom
     the operation oS the law in it8 primary purposr
     and objeat. In other wWrQ8, the legislation is
     8pecrifiothat 8uoh private pipe lines were never
     inoluded in it8 ten&m. Evidently the Leginla-
     ture 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 Oommlssion0r Taxas, et al l..SSTax. lP5,
155 S. t?.(nd) 9, a8 controllingor even appiloable to the
situationet 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 utll-
     it9 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 pro-
     ducer 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.       .    .-   (kLpheeieours)
            Thus, it &e soon that the oourt was dealllrgwith
  the j~l8dlutl@n af thm Ullroed Coar.lesionto 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.cmeirbm what we hmr said tkm omratioae
  or the :?epubliaNatural Oar t?wgmny bring ft within the pro-
  visions ot Eeotion 8 of 4+fele 0080.   Ihe ooprpanlr 18, there-
  ftxce,lleble for the tax Sapwed  by AFolale 6060.

            Article 6086, F%evilwaCiVll Btac~tse oi Texar, rea48
  88 ?ol1a01
                  aThe Gosfabeion may requln o? rll persons
       or wrporetiesa     opcrrating,   owning OF oantrcbllbg
       eueh      a pipe liner ewora report8 of the tatal
       quua tr 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 pree-
       sure nwdntdnwl, end th8 amount    anb bher8~tbr
       end deeorlptfon of the lqufpilunt  emplosed, and
       awh oc&er ~ttaxs pcr8alnlag fo the bumins
       sethe 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 ogln-
  ion 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?DJUL 11, 19 1
                  A                -

ATTORNEY GENERAL
   iwE ILli5