Case Information
*1 . . . . 513 OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN
0cMI.D 0cMI.D 0. MAN” 0. MAN” ~nxemmv an*maL ~nxemmv an*maL
Honorable Clinton Owalry, Dlm&,or Honorable Clinton Owalry, D~.m&,or
ckls Utllltisa Division ckls Utllltisa Division
Railroad Comission of Texae Railroad Comission of Texae
Dsar Sir: 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 ddltjon to / ained in auoh letter, you am ad- ublia Ratural @aa Oampanp maker as under oontraat to the Oity oi Oorptaa Ohrleti, Tours, tram the Sax&. baa Field in Nuooes The Oitp of Qorpue ~Obrlstl in the owner county. of the gas pipe lins, rour and one-halt allwu In length, fmm said field station of the City of Corpus Ohrirrtl, but pay- to the town border menta of gas to the I?epublio Natusol Gaas Company *2 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 adjustment hae aver bean made for lost and unaooounted for gae in exee8a of 10 per oent.
.wRepubllo Natural 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 the City or Corpus Ohrirti. Ths pipe llns referred to In this unit was aoastruotsd aubro- quent to the oonatruotlon OS said road. Another portion of the gathering a7stam of this aawn orossss Bate Highway No. 9, which was ooartruoted subsequent to the aonstruotion by 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 jurhdiotlon of the P&lrctad Ocamlsslon OS Texas is oaafcrred in Aptiole and 6060.a Artlole 6060, Rsvlsad Civil Statutes of hxas, reads as Sollows
vEvery gaa utility subjaot to the pro+i- alohs or this dubdlvlslon on 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 P noome re- oalved Szwn all businooa done by It within thlr *3 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-aeoond Leglelature (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-fourth of one per oent agalnat person8 owning, 0 orating, or men- f: aging pipe lines, as yrovlded 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, wing pipe linea as provided in Ssotlon 2 OS Artlole 6OSC, we must now detennlne whether the operations of the Republlo Natural. Catv Company bring 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 'publla ntll- lty* or lutlllty,l aa used in thia l ubdlvialan, mean8 and lnaludea peraonr, oompanlea and prl- rate 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 more 0s r0iiwhg kladr 0s bualneaar
". . .
"2. Cwnlng or operating or managing a pipe line Sor the transportation or 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 oqulred by th8 8x- eralee or the right oS eminent domain; or if aald
, right of way of any railroad or other ]jublio *4 Honorable Clinton Owsley, "age 4
utilltyg inaludihg also a09 natural gas utility authorized by law to exerolsa the right of bm- lnent d ceoain. " (Emphasis ours)
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 subsequent to ths oonstruotion of the mad. Another unit aronses a Stats highway whioh was oonstruated subsequent to the oonrtruotion or ths pipe liner
From the underaoored part of the abow q~uotsd statute, It is apparent that thass operations bring 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 Williams v. Stats, 109 9. W. (8d) 489, lnvolvod the oilen8e of unlawfully tapping a pipe line under xrtlole llllb OS Vernon*8 Penal Cods. 310 Court of Criminal had ths iollowiag to 8a9 of the term pipe liner &3Xd8
'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 oonveyed Srom one plaae to another.*
Without doubt this dofinltlon vmulild Cover tha gathering 89Sta& -ever, we are oonvinoad from ths very IIS the lagi8lativa wortllng or the 8tatuto itseli that it intant that gatherIn& srystem pipe lines were to be lnsludad.
'Ihe statute provides speolrioallp vwhother ror publia hln not.” Thi8 olssrly tidloaterr that private pipe llms are included if the Other oondition8 are prasont.
lhe ilutaut 8ituation is olaarly dirrtingulahabla 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 solleatfng an intangible tax lmposad by virtue oS Article 7105, Vernon18 Annotated Olvil Statutes. In oonneotion with its rsSiner9 the oompany had a pipe line *5 Ronorablo Olinton 0~81ey, Page 5
whioh it used axolusivel9 to transport 011 that It pur- chased Srom vsrious producers to the reiinery. The only question to bn deoided was whsther Artiols 7105 applied to thie type 0r pipe line. mad8 in part %8 fO11m8t
&tiOlO YEaoh inoorporated railroad oompany, ferry company, bridge oompany, turnpike or toll oom- pany, 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 territory, or SorelRn oountrs. and every other I nUlr1dua.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 Intangible assats and property, . . . “[%pkm8iB OUr8)
The oourt found thst tha oos~pany was neither an oil pipa line oclapany nor a common oarrier 011 incorporated 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%;‘pipa line oampany would oarry on the traxwportation Of oil a8 a bu8ins88 and prs- sumptivalp Snr hlrs that,tho transportation OS its own oil by the ooapsgt~ its refineryWa8 not bUsine8s of the same oharaoter. , the oompany was not liable foor the tax. Ye quote ffora th3 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 incorporated pipe line oampany, oarrisr, etc., that is, engaged in the transporation OS oil a8 a busllurss, and preiwmptfvely Sor hire. . . . IO ths u8b it made oS its gathering system the raSinsry in no sense *6 Htmorabla GXinton G~nley, Pac?e 5
of the word wa8 doing the 'same oharaoter OS ’ as that referred to by suoh language bU8ineSS in Art. 7105. . . * This argument doea not apply to the presrnt situation at all 8ihoe Seotion e or iirtiole 6050 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 8pecrifio that 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 not" &early lndioated that prlvat8 pipe to bs inoluded. line8 were
be deem it proper to ad4 atthi8 point that we do not regard the oa8e OS Humble 011 & +?aIAiDg Company, et el v. Railroad Oommlssion 0r Taxas, et al l..SS Tax. lP5, 155 S. t?. (nd) 9, a8 controlling or even appiloable to the situation et 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- &UthOdSS OOmillI9iOn t0 fir it9 8tatUti6 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 *7 Honorsbla UinP;on Ov6lep, Pe@e 7 the right of eminent Qwfaln ia regard
axnrolse 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 .- (kLpheeie ours) uti1:ty. .
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 Oar t?wgmny bring ft within the pro- or the :?epublia Natural visions ot Eeotion 8 of 4+fele 0080. Ihe ooprpanlr 18, there- ftxce, lleble for the tax Sapwed by AFolale 6060.
Article 6086, F%evilwa CiVll Btac~tse oi Texar, rea48 88 ?ol1a01
aThe Gosfabeion may requln o? rll persons wrporetiesa opcrrating, owning OF oantrcbllbg a pipe liner ewora report8 of the tatal eueh bg swh 9%9e llrme quua tfee ot (o&a dirtributsd tr 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 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. 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?D JUL 11, 19 1 A -
ATTORNEY GENERAL
iwE ILli5