     OFFICE OF THE ATTORNEY      GENERAL     OF TEXAS
                        AUSTIN



                                                XEly0, 1939


Honorable Tom L. Beauchamp
Seoreterpof State
hustln, Texas
Iher slrr


                                                          .




                                           ot you? lottaror
     Honorable Tom L. Beauchamp, Iday8, 1939, Page 2



                more from date of issue. For your oonvenienoe
                in determining the issue8 at hand, we em here-
                with handing to you a copy of the offloe memo-
                randum oonk.aInIngthe signed ruling ot Ssoretarg
                of State Jane Y. IdcCallumthat suoh gas pipe
                lines are not publlo~utIlItles. Pteare also
                herewith enclosingour correspondenoewith 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     iii43With thb
.               oorporation.            ,
                "We4would themrore ~apprsolatm.youroolwida&ioJl
                t%UdOptfd011Upon 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 r0ii0wingdspatitmental 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!;oreare several
         statutory provIsIons deiinlng oertain b&i-
         neose8 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 In-
         volve the validity of a tax to support a
         pub110 see. Aa pointed out on Page 5S7 of 262
         U. S. Reporta, the Legislatarsnay levy a tax
         ror any purposa In whIoh the State way~aa~.
         mob pr40tio4iiyoovorath6 ri4id or




         *Tide dapartmsnttherotors aUopt8 the qonatmo-
         tlon *hioh Is saggertetd     3.4the 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
         .rhlghara‘ln Saot pub110 utility oorporatlona
       . and angaeemy         In bualneaa aa auoh, only
          Ii thalr aervloa or ratas are aubbjeotto regular
        .tIon by law, other than      for msra purposaa of
         pOlIoa regulation,wul that any aorporationwhiah
          oannot olearly astabllsh Itsolr to be withIn thI6
          olaaa will be held to oome within Paragtaph (A)
         as a private bufalneaaoorporatlon.
          "Ths rollowing olaeaea of oo,rporation
                                               .arenot
          reoognized as publio utiUt+rs:.......
          "10.   Gaa pipe line?. t3aspipe 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, 6051, 6052, and 6053, R. C. S., 1925,
  amended, classify the 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 regulationand
 ntrol'bt the Railroad CommlaaIon. Evarp aaah gas otllltf
  requ,Jred to keep %aoka, aooounts, papers, reaorda, ti-
 Ipta, 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
 .taralaa are eaah-daolaredto be a publIa utlllty, a%-.
 @tad with the pub110 latareat,ax@ In nature and aooardIq
 I th6 eatablIahedmethod of ooaduotlng same a monopaly,and ,.,
 tblaafin xYmp&Ot to all-theirhaldIngs partainIa&fo .th8
 111bualneas and In-all ralqtlona to the publlg, and Iansprat
t their produoing,traaaporting,maaIrlng and d.IatrIbatlag
rotIlItlea,to the ipll,and oo late,oontrol aad aupervlalon
' the Railroad CauaIaalon. Aut"gorltf Is also (#van tha Qam--
~aalonto fix, establlah,and ltioroa a reaaonablarate whIeh
Lpa 1Iaqa may ohargs .forgas dellrarad at tha olty gate to
aothardl8trIbutIngoompany or aunIoIpalIty; to Six a
iaaonabi+zat&ror ,4assold and delivered by pipe lIsaa og
ther dlstrIbutIngoaaqanlaa to tha pub118 ior dcmaatla az
ther aqe; and to-fir aad astabliah a fair and 8quItabla
1vIaIonOi tha prcioa@daor tha aala of lratllrdL&a8 batuaan
hh-pgmluaIng,ortransportingampa.nIsa aad the~ooaganlaa
latrlbutlngor 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 $iublicinterestla not
eaeasarlly binding upon the ooqzt In all In5tanee8, yet auoh
 deolaratlon is entitled to e&ious oonslderation. In this
artloular Instanoe It would aripearthat the courts hav'oSO-
opted 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:iteof 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
    grollodthat the rate whioh had been sat ~88 unraa8onable,In
    that It aid not takesinto .00aa0tati0n the o ver -alfiaenoe.
                                                           ll
    Th$s 0atiehas again been passad upon by the Court OS Clril
    Appeals in State of Texas Y. &me star Gee compsny,pot yet
    r0prtea. Th& OOUI%, In 0038piying   With tha m&at0 iXQla.thO          _,
    Saprome Court that It o0ntInUo With rurther prooesdlagcrnot           i:
    Inoonslstentwith Its opinion, has rgaln Uphela the aotlon
    of-the Baflroaa aaamieslonIn 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'-on-
   gagea in the mamSaotw0 ana 0uppl.y0s 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           :
   iaetagaafn that type of buslness. atag BlaIr,:in writing
    the apInIonof.theoourt, atatsdt
              "Passing to a aonaIileratI0ndi ~sUbaIvI6Ion
              (a), aupra, of the FranohIse Tax Aot of 1QW
              wo slnd that it nosltherexpressly nor lmpldly
v             lnoluaes or olaemiflesror taxing purposes prl-
              vat8 oorporatlons0ng*gea laths man&aotUra
              and sale .of108 to the publio Ia ‘fsxasdo *pub-
              110 utility oor PatIons.' Under the Jang~age
              of 6ubalvlslon a) anl    'pub110utility oorpara-
                              $” Iao3Use every maoh oorpora-
              tlons, whloh shall
              tlon engaged solely in.the buSillss8Of & publIo
              utllitr whose rates or serrioe Is regolated,or
              aubjeot'to re@.latlon, in whole or In part, by
              law,l,are Included. It if3BVUli?aStflWIlthis,
              language that the.La.gialaturedid not intend
              to inc1ua.e within t&6 statute any~ooqwratlon
              whloh'lt .hadnot theretofore,or might there-
              aft,er;,deolareto 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-Jlaw*. 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 deolara-
         tory statutes, daolaringbuelneswo or anter-
         prises to ba pub110 utIlItlea, or to be af-
         foot88 with the pub110 inttbrsst,and In sub-
         jsotlng them to soma sort o?.publIo rogdla-'
         tlon or oontrol. And aspeoIallyhasthIa
         been the praotlos of the LegIslaturcwIth~ "
         raspsot to businessasor ~aterprlrres uhIoh




         ~egal'mattersof astermInIngwba* brulquse
         ati publIo.utIlItybusInaasee,'ol! wh& We
         porations are pub110 utlllty~oorpo~tlons
         or of determInIngthe mattsr qf what publio
         utility oorporatlons*rata8 or urrloa ara
          subjaot to regulation. It i8 w8ll 8etti0a
         that the forum Sor dsr4arIoga budnose to
         bs atteotsd with tha inablLoInteroat, and
         -iOr 8UbjQiltingits FatO8'Or U3lTiOO t0 ram-
         latlon, is fn the first i~tanoe the Legis-
         lature, and, until the &#slatura haa 80tea,
         we do not think abrlnl8tratire ofrlolals or
         departments OS ~srnn~6    8~ ‘d'eterainethe
         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 ap-
plicable 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 reluotasoethat we disagree
with a aontemporaneous oonstruotlon by your department, we
think thst In the light of more reoent expressions OS the
saa&, not availeblawhan tha ruling was made, that a gas
&s   1xns s@zpozatIonsuoh as dssorlbs~ In your latter should
bs olasslrlaaas a pabklo Utility.
            This aepurtieat Is OS tti8oplnloa that those &as
pips   line osmpanlesileflnsaIn Artlsls 6OSO B..0. S., 1925,
aa publIoutllltlssahoultlbe olas8iriedas pub110utIlIty
00rporatioa8as 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 .aetemIaatlonthat a gas Ipe llao
la Art1010 6080 Is'%st"In.faota publio utiE tp and llot sub-
Aiot * reg9latIon.
 :                                      Very   truly   yours   .
        .,
                                    ATTORRETWUERALOFTJU42
