            OFFICE OF THE ATTORNEY GENERAL       OF TEXAS
                             AUSTIN




Houumble Fmd L. Blundell
Dirtriot Attmy
22nd Judlalal Rlatrlct
Loo%bart,TeJBI

Dear sir:



                                               LulLng Indqpemdent
                                              latrlot# llrnl
                                                           ii aon-
                                              in trenat, what 18
                                                  length of tbm 1t
                                                  in rtomge vlthout


                                       5, 1945, you lmvv reqrueted
                                        to the above mbjeat.       me
                                    P en, quoted:

                                      8 a tanksmulloQated
                           epeudent 8ahool DistCiot. Catplny
                                           Apmtofttmtmk
                                    IlErto rtore OPudO Oil and
                             uaodbythoa0a&WytostonWude
                           lat.,.19'&5company 'A‘ reported bvln&
                           or bnrrels Or amde oil In otorwe
                             rrohooldistriot, subject to be ren-
      dePud ror taxsrr.      The nwnber of twrel8 of arkle oil
      mpartud by aomyany ‘A’ VBS aoaoiderebly lea8 then
      the number reported by the Rallrosd ~cmaloaion. When
      the otYiaersof ctmprg *A* vere retid abcut the dit-
      rert?Rce~they stated that a pert 0r ths Oil vhloh vas
      iR StOl’Wge 8t Lulli-@    dFd not hem '8ltuS' il3th. LuliW
      Schwl DistrirJtend therefm         ~8s not teacablebY tb@
      diatP&ot .
Bon. Frad L. Blu~dell, Page 2


          "We rhould 8~raOiSte   your opinion ontbe
     follOvtRg quSatioRar
          '(1) Is all arrde oil vbioh is bald by
     coplpeng ‘A’ in .Ftorrr@s
                             *t tha Lullq tank S6rm
     on Jenuary 1, 1985 rubjeat to tmcation ?i$the
     Lullag Iadepmxdsnt School Diatriot?

         "(2). If a part af'tbs 011 held in tbs LulZng
     tank ferm on January 1, 1945 is in trmalt and not
     taaPbla by ttw Luling Sohool Matriot, bov lmg m~y
     it ba lmld in storage at tha Lullng tank frzm awl
     mot b8 aubjeat to tS%StiOR by tbS Luling Indqmd-
     eat 96ho42 MaWLot?"
          Without mom details regarding tha atOm@    of thy
oil In question, a deflulta aneva~ to the quest&ma p~aaatad
is difficult. T h eltakmantbytbo    aompanytbattba   lItw of
tb* 011 in quaatlon vaa not Fn tba soboo% diatfiot is a ocwlu-
aion vlth whiob, In ths lba*noe of knav1od&m of tba t*ata ou
vbIubauPhocmluaionvaa     baaed,neltberaonourmnoe    nordla-
agraamant la peaslble. HOU*WOC, e dIaquI*itlon Of tbs pmx~iplma
hare tn~olv~dnpgaervatoa~awr      tha queatiom ga~mallytithout
               ofnfurthar
tllblub nfa a io          detailed ~aota.
          Assuming that tha tmcatlon la question 0uq.r~a ad
valomm taxya, the taxabllfty of the 011 in a+~%‘@= turna on a
detorml.natlonof the eltua al awh Oil ior taxfltl0npuPpWe*.
           Oslmrally, tlaave11le*tab1I*&d oomlcQ1aw mrs3.mef
"mobIl$a aequuntuc ~raorma" (srmblea follcw the poraon) or ths
p~imfpiail tbat  pwowl    mperty    ban its legrtz aitua at tha ploae
cb its wner'II dolgci10 r&aa governed the taxationof tSn@blS
   rrOnSlproparty. Although the Coartitutlan of 'hxaa (ArtIule
r , Seotlon 11) pZWidS8 tbSt "all PrOpartY, VhSthSr ~vn~d by
pa~~ona or aorporationr shell ba iha8seaed fan teXMlan,     a@  t@aes
paid tn the aounty vbwa altuatSd", it hem baenhrld bytba Sumnm
court of Texea tie this provlalonia      uomoretbans     dsalaratlon of
the oom~~iavrulelntbat         "aln0S it bad nf6r~~0stotbataxirig
paver!,ItievldSntlg nmarltpropS??tyVhSro aitusted tar thS purposes
of te%StiOR under the B*IUW51 pPiW~)3~88 of lav am thsn un&0r*tood.”
(city of port Worth Y. southland Ga’ephoundLlnea 67 9. W. 2d)
3%;    8. c. is2..F. Ry. co. 0. cl* of Dallas, 14 s. u. (26 2921
 Ho&* Fred L. Bluz?Mll, Peg;03


 0-t    g~~pqu&           IUS. 00. .v.city uf Austin, 243 91 v. 778;
 city ,& mfmtm     Y. liadea, 2ll Be w. 766~ Parri* v. KlmblS,
 12 a. w. 6%).   'phiainu    zwatiet;,is aeld also to apply to
 Apt;al@ 7153, Revised clfvi
                           "p StatuEaa Op lba*, a* ACED      *f+
 pow owlOwnt to the Sbovr,Owmmm.anal                 pmmlalaa (me0 OS***
 aupm ), vhich provtdra :
             "All pmmFW.    awe1 and pam+anl, exoept much
       am ianqulrvd    tok1iakdrndea#*aedothania*,
       @Ml1 ba llatedend la a 0a a tn e6tha *omty ulmse it
       ir SitUSUd1    Snd ell pesamal propert , subjoe   to
,.,i   trXationendteu&mmrl~yx'elO*dd     frtm thaStaM   0
       OOdaty,shall W liatofllrd saaia*od in tha *Nty
       d tha kaldewe     aS the mmar tharoof, or in tha
       B)OuatY when   the prLnaQe2    offioe   of   Suob OUWP   is
       aitwtad.w

           HWWOP,   tha prlmofplo tbrt the tezeble aitw o?
 peraakalpmpotiy   La at tha naldmfae of the mner %a notrttheut
 eroeptiwa  and iteppeeravell   lottlodthatteryLibl* pwaaul
 p r r p g y dw~8~ub o    a lltua fa ruxatiar
                                      ,       81 p vlmrta
                                                       0n b &
                                   Y* l8Sdea, a\rpn,
                         (OSlolsStOti            rad 51 ti. JUP.
SW. 451, p. 466;. It l.au&d that the lltw of tenglble per-
sonal pmpea-ty~depawla    on #a otmsaetw oi sa wo (0.~. & 8.~.
Ry.Co. v. CltyofDallaa,aupn)ardtbmtthe           teatiavbmn
o r no t‘tha p p q etp is lltuatad titb lt~
                                          tk jwladiatfw a m,y
$a-a~~ie~,peofit thwe.        (51 k. Jur., sec. 454, p. 469 lti
               .




 tha ovne~*m dcunlclledoar not aoqulre taabla           aitua in     awb juria-
dtitiou (Fort With       Y. Swthl4nd Licma, luprefi FSTCIS t. ELrblo,
arrpre$ 51 Am. JUT., Sac. 455, p. 469). Dal*ya in transit, humvar,
mpy ox-o&a teoblo aitua in a jwiadlctlon~    tm     which tha proparty
pSaaea and much tama on tha mt        ati dumtioa of tha belay (51 Am.
Jr., Sac. 45Sr mupro; Awe. In+%? L. RX
            IX tb delay is      lnoldent to tha tmnaportat%~          o? #a
property, no aitua is aaquimd, but if t&o pmpmty   is do&aim94
in tPenai,tfan e partiaulasll
                            pwpwo  oc objeot other than Its
Hoh.'Fred L. Blundell, Page 4


tranapOrt&iOn, situs la acquired In the juriadlotion where
it vaa 80 detained. So it hem been held that 011 aaaumulated
In the uorklng tanka of e pipe line oompany by reason of aon-
geated traffia and the lnablllty of the aompeny~a patrons to
receive the production of the fields aarvad d,ldnot aoqulre
taxable situ8 in the county where it vas held in store e (Cum-
berlend Pipe Line Co. v. Commonveelth, 79 9. W. 2nd. 3% 6). On
the other hand, 011 shipped from one jurisdlation to e aeoond
where it was to be leparatad and processed end then shipped to
a third jurlsdlatlon vea held to eaquira altua in the reoond
jurimdiotlon alnce tha purpose of the deleg we8 not lnolent to
its trenaportatlon (Oeneral 011 Co. Y. Craln, 209 U. 9. 211).
It has also been held that grain shipped from eouthem to eaat-
em states but removed from tha oars in an intermediate state
for the purpose of olaaalfloation and saoklng aoqulred taxable
Bitw  in the lntermedlate state (Baoon Y. Illlnola, 277 u. 9.
504).  In this lest Oaae the ovnerahlp or the grain and the
right to dlapoae of it or divert its shipment in the lntermed-
late State we8 oonsldered a material f8at.w.
          The duration of the ~dalay should baer a dlraot rela-
tion to prevloua pract&oea and the usual oourae d the bualneaa
under oonalderation. t ham been maid that permananoy of 1ocStlon
la not required to fix faitua for taxation (0. 0. & 5. F. Ry:Co.
v. City oP Dallaa, rupra) and that the queatiq3 is ea much one of
feat 88 of lav (Qrlggaby Conat. Co. v. Fraawg,   32 Se. 399). The
concept of permanenoy in this ragSrd is variable and ona vrlter
(oonf'oundedby the Imperfection of words) deaarlbad the location
of property oonte lated em "permanent for the time being*. (51
Am. Jur., 900. 454"g .
          From the foregoing, it Fa apparent that the taxabilIty,
or taxable altua of the oil in question oannot be properly deter-
mined simply on the premise that It va8 stored on a oertain date
by an oil company or by e pipe line aompany. Ror aen there be
fixed an invariable time when the 011 (If in transit at the out-
set) cease8 to be transient and beoomaa Apermanentt." 1t is not
impossible, hovever, to consldar the questions in the instant
case contingently.
          That portion of the 011 vhloh a8 of January 1, 1945,
was stored incident to its trans ortetlon should be oonsldered
in transit and not taxable. Prois tlve OS ita being In transit
are such considerations as that (1) the tanks in which it we8
stored were an Integral part of the pipe line trana ortetioa
system and vere 80 rendered for tax p~osea,   (2) tie use of
the tanks vaa exclusively for storage of oil fn transportation
or that the tanka were not ueed for storage for other purpoae8,
Hon. Fred L. Blundell, Page 5


(3) the Oompany'8 only Interest in the Oil wa8 its tran8por-
tation, (4) the owuer8hip of th8 oil rent&3 in ram other firm
or peMon,  (5) the 0    ng wa8 obligated to deliwr it to a
deflnlte deatlnetlon,T 6) the oomp~ny hsd no right to divert
it to any use of its own.
            That portion of the oil whiah 81 of Janu8ry 1, 1945,
was     stored
             for purporee other  then its tratyportation rhohld
be oon8ldered to haw aoquired 8ltu8 in the rohool dietrlct
and, therefore, taxable. Probatiw o? 8uoh acquirition of
situ8 8re ruoh coxmideratlon8 618that (1) the oompauy oumd
the oil and had the right to ume it ior any purpo8e it might
choose, 2 the tank8 used wer8 not a p8rt of the pip8 line
8y8teIU,[I 3 the storage MI illtank8 generally u8ed for pur-
poae8 other than tron8portation,    (4) th8 oil ~88 rtored for
pUrpO8e8 Other th8n tIW8pOl'tPtiOn 8wh 88 reparation, Fedi8-
tribution,   oonaumption, sale, etc.
          If any portion oi the oil det8rmined to be in
traIl8i.t
        at th8 OUt88t MI) held or delayed la rtor8ge for a
period of tlm8 entirely dirproportionBt8 to the urual p8riods
in whiah oil l-188been previously held without 8011~rub8tential
rea8on therefor, it 8hould be aormidered to haw aoqulmd ritua
for t8Xi3tiOnin the 8ohool dirtrlat. !#8 pO88On fOr 8~ dblay
should ooooern 8triotly the trannportstlon of'the oil 8uoh a8
break-down8 or oOng88ted CNIffia.
          It ir hoped th8t the above asp serve you in deter-
mfnlng the taxability OS th,eoil in the lnrtant aa8e by th8
8ahOol dirtriot. If'it rhorildnot, it i8 8IAgge8tedthat a
statement by the arolpanytogether with Saotr pertinent to the
above be aubtnltted for further aonslderatlon.




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