        OFFICE OF THE ATI’ORNEY     GENERAL   OF -
                           AUSTIN




or. Gw J. Gtraoar, Director
Qao Utila.i.eeDivision
Bailroad Conmloeion or Terss
MrJtsn, %aa8

Dear sir:
             ,



                                              b   yootlr iettcrr    0r
                                        oat0 your requeet          ror




                   eale to the CLtp 0r Palaoloe,
      Texas should the City 0r Palaaloe aaqulre a
      dfetr~butlonsyetem to eerve itiarerlidimte.
          “The above deskbed bperations were begun
     about Deosmber Xl, 1940, an8 rrlnaethat time
     several bemade have been made ot Paltef Oil
     aa G.56C0111pan~ to file with the Raimaa  Com-
     mlsslon or Texae the quarterly reports required
     ot gae pipe llno operators by article 6080, Be-
     ylfied Cltil Dtatutea, 1985.
                                                                     .cPi;.>
t I&. Gue J. Strauee, page Z
! ..'
".




               “The Railroad Codraion or Rxaa haa pre-
      :   roribea a form o? annual report for suoh oparatwa,
          a8 provided ror in Artiole 6056, liwised Civil
          Statuter, 1926, ma d6Wna8 hate been made of     -
          thi8 oompany to rii6 suab anaaal report8 rtth
          the Gow&3e~00.
                Vhe C0mpan.Jooatenao that it i8 not a utlllt~
          and that It 18 beyond the power or tbm Leglrlatare
          0r  Texar to olaerlry it aa rush; aad it haa, there-
          tore,  reXuse  to ffle the report8 requfred by drti-
          ole 6060 and the order of th8 .CoPniaaioa 6ntcrea
          und& Article 6056, It baa ale0 refueed to per
          the &rose reoelpta tax68 $evled by article 6060. "* **


                    You pmpouad the question:

                "'Plea86adds6 u8 at pur earliest oonveniencs
          (1) whether or not it 18 your opinion that Paltsr
          Oil ah6 Oar company is a gai utility a.8defined
          by Artiale  6060, (fi) ii it i8 anbject to t&e re-
          port8 tuia tare8 preecrlbe(l by Artlola 6060, et16(3)
          ha8 the CoarnlSEiiOn  authori.ty
                                         to require the Oompany
          to rile the imaual raport ptisori,bea   by the COIDIP~~-
          sion under Artiole 60567"

              We have asoertalaedfrom the Searetaryof .Statethat
  Paltes 011 an6 Oa8 CO~QM is a Texas oorporatioa,bsvlag aa its
          0hn8e "to ertabJ 8b Ma Mblt.dQ an oil bWhae88 with
  purpoose.
  authorityto oontraotior the lease and purohaae ot the right
  to prorpeot ror; develop aad.we aoal and other mlnaral8, petro-
  loam -awl-8; also the right to erect, bail4 and ovm all avow-
  aary oil take   oare ~aadgipse neceaaaryfor tba operation of
  the basine88 o8 the aaw.    Subdiriafon37 0r mtiole 1302,
  Veraon*s Annotated Civil Statutes.

              The pertlneat etatrrtes ore iirtlales6050, SO66
  a06 6060, V. A.C.S., WhiOh are as rOilOW8:
      “Art. 6050. Olaoaiflaartian
      *The tean  *gu8 utility* an4 ‘publio utilltp’
or futility,’au uaeC it3t&is subdirfrion,waw
anb inclubem persoda, eompaaies anb private uor-
poretfoas, their lcseeee, truatecrs, 3na reoelvers,
owaing, tmm.ging, oparating, le3aing or oontrolling
within tiia t;tateconywells, pi;lelime, plant,
property, equipsent, Snoilitg, fronohioe, license
or pernlt ror sithsr one or nkoreof the following
kind6 or ~wlnesat
      uaaa
     .
      ‘* Owning or operating or managing a pips    .
line for the treasportutionor oarrfage of natural
ga8, whether SOT pub110 hire or not, if any pax3
of the right of way for said 111~ ha8 been aaquired,
or m4 hereefter be aoquirea by the exerolae or the
d&it 0r eminent a0iianl or If e+fU line or any part
thereor ie la14 upon, over or under anp publl~ me4
or highway of thla State, or street or alley of any
muniolpallty,or the right of way of any railroad
or other public utility; lnclwiing also anf natural
-8 u%ilit~ authorized by llzw to sxeiciae  the right
0r eminent 4om~1n.
      (1st
         * *s


      *Art. 6056. Operator's reports
      "The Coti8eion may require of all persona
or oorporatfonsopera.t;lng, owning 0s contmlliag
auoh gar.pipe llnee auorn reporta of the total
qunntitfes 0r gae dietrOuted by suah pipe line8
and of that held by them in storage; an4 aleo of
their aouroe OS oupply, the awabcr of well8 fcon
which they draw their eupply, the an&at of pree-
awe malntaineb,a.124  the mount end oharaoter and
de6OriptiOri 0r the e,quipaentemployed, and rue&
other matters pertaining to the butdneffr af the
Commisalonmay seem pertinent.W
%r. Qua   J. istrausa,   page 4
                                                                 I




              *Art. 6060.    ut   1llt.pt&X
             "Xver7 gas utility subjeot to ths lffovlslonU
     or this subdlrlsionoa or   ber0re the first day of
     '~JanaQryand quarterly thereafter,shall file with
      the Qo;rmissiona ststsaent,duly verified ua true
      and oorrsot by the president,   troaeurer or general
      manager if a oox~j~~nyor corporntion.   or by ,the owner
      or one oi them if an individualor co-partnership,
      showing the gross rsoelpta 0r such utility   r0r the
      quarter next preceding or for suoh portion of edd
      quarterly period as such utility mey hsvs been oon-
      duotlng any busl~eso, and at such tirzer shall pay
      i.ntothe State Treasury at Austin a scra equal to
      one-fourth of one $er oeLt of the gross lnco:m re- .
             f om.all buelnoss done by it within t&la
      oelv.rsd
      Stata.du  ng said quarter."
              1Er

             In pu Opinion MO. O-352!4a,  the orlglnal~ofwhloh
you huve in your,.b<loo, we had before us the puentlon of whs-
ther the hspu'blldf atural gas Company, organlsed under ths sams
subdlvislon,war rspulrsd to rii6 the report8 and pay the taxe8
sought to be required in the instant ease.
               ke thera held that t& Bepubllo Patltral.
                                                      @as Corn-
p&.war not liable for the gro8s reoelpt6 tnx ee providad in
Article 6050, supra. &oh holding was predloated upon tha
propositionthat the co
of gming or owrating or
transportntionor oarria
ale dOO#)tthat the transportationof natwal gas was but in-
oldsntal to the erooutlon of its urposr of opsratlng an 011
athad
    gas produolng btMnes8 under gubdlvlsion97 of Artlols
lSOE, B.A.O.S.
             The faots upon whloh the Eepubllc o?inlon was
written were8
             The oompany owned a number of gas wells In the
Saxet Field, lueoea County, Texas; that it had pipe lines from
its wells to (Icentral point on it8 own lease, where the gas
isrola e.hd~dellvered  to the City or Oorpus Christ1 through
a line omed by that ofty; its lines oonetituteda   gathering
system on its own leases which brought t)le nns to a central
point l'orsale and delivery.
h4r.Gus S. i3trauas,page b                                ’
                                                          f
                                                          _~ lt3f-3



              In the instant aase, Palter Oil and &IS Corapanp
18 not fsllfng gaa whioh it is authorized by its oharter to
prodtaoeiIt is purohaslnggas rroa other produosrsand trans-
porting it through its cm lines iOr the purposs Of rs8sll.l~
said gas to ths Units6 Stat88 Omernmsnt. Ws do mt pass upon
the qwetfon of the right of Palter 011 and Oas Compa;r urndsr
its  ohartex to purohase gas for the purpose of resale. Bufrios
it to my that by rirtua of its doing 80, it has, in our opta-
ion, oonetltuted itself l gas utility within tka plain language
of A~tlole 6060, eupra, and is repulred to file the reports
sad pan ths taxes pruvidsd in Artlolss 6OS6 and 6060.




                                         ) _ Lloyd ArmstfOI1(;
                                                    Assistant
