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                                           September14, 19%


  .    Hon. Fmlest 0. Thcm;son,                         Opinions
                                                               s-140               .~
       RailroadCcuomissionof Tex
       TribuneBucbUng          T                        Re: ,Jurisdiotion of the RaiYxosd
       Auetin,Texas                                          Commissionof Texas to control
                                            .<               and regulatethe iu$pliersof
                                                             naturalgas when such gas is
                                                             used to pmnp water for agri-
                                                             culturalpurposespursuantto
                                                             Cbfzpter31, Acts 53r;aLegia-
       Rear GeneralThompson:                                 fatme, lst:cSS.,199.

                          You have,.
                                  requested
                                   .~      that this office

                        "adviseby opinionas to whetheror not the Rail-
                   ipad Ccmrmlesioncan demand that the suppliersof ~uatural
                   gas, by pipe line, for agriut&ural uses, as defined in
                   H.B. Ro. 6k, ehall cmaplywith all of the article 6050
                   td 6066 imlusiiie,~xceptArticle'6050   which is speotii-
                   oally exaludedby H:B. Ro. 6b."              i
                 HOI& Bill &wasetiacted iuto law as Chapter31,Acta 53rd -
        Legislature,fst Calledseseion,19%.

                  Fu&hUr oommmicationswith this office estabUsh that ~yoti
        speoif~callywint to how thecharacter,ofoperationsoontemV&atedby
        Chapter31, necessaryto exempt the supplierof naturalgas from the
        pk-ldms    of Article 6050, Vernon'sCivilStatutes; if suppliersof
        naturalgas for the purposesset out in Chapter31 areex~emptfrom pay-
        ing the gas utility taxlevied by Article6060, V.C.S.; and whether a
        supplierexemptfrom the tax will be subjectto the safetyrules md
        regulatiousof the RailxoadComaiasionof Texas.

                   At the outsetwe refex you to AttorneyGeneral's~Opiaion Roe:
        S-123,written prior to the enaoivnent of Chapter31. It was theke held~-~~
        inter alla, that the RailroadOonmissiouaould not iesue an order,pxovid-
        --
        iug that a suppllerof naturalgas to a localizedarea for irrigation
        pmup fuel-wouldnot be a “gas .utility."The writer thereofobserved,
        however,that "irrespective  of such detennination, the statutorydefinl-
        tion of a 'gasutility'prescribedby the Legislatureaould clearlybeg
        emendedto providea speaifioexceptionfor the operationsdescribedIn
        your request."
Eon. Ernest0. Thompson,page 2 (S-140)



         We bellevethat Chapter31was enactedpursuantto the above
holdiugaud observation.

         Chapter31provides in part:

        *Section1. Article 605Oof the RevisedCivil Statutes
    of'Texas,1925, is herebyamendedby adding theretotwo uew
    sections,4 end 4a, to road as follows:

         "'Sec.4. provided,however,that the act or acts of
    transporting, deUveriug, sellingor othenvisemaldug avail-
    able naturalgas for fuel, eitherdirectlyor indirectly,to
    the ownersof irrigationwells or the sale, transportation
    or deliveryof naturalgas for any other directuse in agri-
    oulturalaativitieeshall not be construedwithin the tams
    of this law as ooustitutiugsoy person,association,corpora-
    .tion,trustee,reoeiveror partnershipas a 'gasutility,'
     'publicutility,'or 'utility*ae hereinabovedefinedso ss to
    make such person,association,corporation,truetee,receiver
    or partnershipsubjeotto the jurisdiction, controland regula-
    tion of the CaPmissionas a gas utility.

         "'Sec..4a. Thq tit&al gas made availableuuder the
    proviaion~of:this Act shallbe used exclusivelyfor pump-
    ing watez for fana end other agriculturalpurposesia order
    for the person,firm, association,or corporationfurnishing
    such naturalgas to be exemptfrom the provisionsof said
    Article 6050 of the RevisedCXvd.1Statuteeof Texas of 1925.
    The provisiousof this Actshallbe oonsdderedonly as cmuula-
    tive of other laws and shallnot have the effect of repealing
    ox emendingany substantiveor statutorylaw exoept as herein
    speoifically provided.'~

          Section4a deolaresthat the supplierof ziatuxalgasie exempt .'~
from the provisionsof Artlole 6050 swhan    thegas suppliedie used.ex-
clnsively"for~pumping water for fam and other'agrlculturalpurposes."
Therefore,lf the gas is used for anypurpoee other thauthepumpiug of
water for agriculturalpmposes,the supplierof such gas would not be
exemptfrcm the provisionsof Article_ 6050.
          Article 6060,V.C.S., 3mp6sesa g&as reoeiptstax on -every
gasutilIty.* Ae the snppllerof naturalgas for the.~prescribed  uee is
not a~"gasutility”  under the terms of Chapter 31,-suchsupplier..Is-t
subjeotto thepaymentofthis tex. Of oourse,shouldsuah~suppliei      make,
sales of naturalgas.tobe used for a purposeother thau "pmup$u~watex?J
for farm aud other egriculturalpurposea",  then the reaeiptef&mthose
saleswouid be subjectto the tax leviedby Article dOo60,. aud thesupplIer
would be a "gas utility"within the purviewof Article6050 insofaras
those sales are conaerned.
L   -




        Eon. Ernest 0. Thompson,page 3 (s-140)                        :       !



                 Itis furtherour opinionthat exemption,from  the ~ovfsions
        of Article 6050,~whichis merely a definitionandblassification stat-
        ute, &es n&t w**    reamve the gqplier of gae uud~~~Xbaj&+ 3i~frum
        the jurisdictionof the RailroadCosmiesionof Texas.      :: ~:.

                  It shouldbe noted that Chapter31 is "cumulativeof other .~
        lava and sha~nothave the effectof repealiugoramanding
        tire or statutorylaw" exqeptas specificallyprovidedtherein.
                                                                 ==fsZ?Z).

               . Article kbil,B.C.S.,provideat                        .

                  "The operation-ofgas pipe linesfor buying,selling, ,.j
             transporting, producingorothervlsedealing innaturalgas         ,
            'iea businesti which in its nature asd accordingto the
             establlahsdmat~ofoonduotingthsbuainaaa is amonoRoly .,.
             and shall notbe oonductedunless such gas pipe line so used
             in ccnneotionwithsuch businessbe subjectto the.jurisdlo-
             tion herein conferredupon the Covmission. The Attorney
             General shall enforcethis provisionby injunctionor.other;
             lkedy."     ., ';
                                                                         '.
                  The above articleis not restrictedin-itsoperationto "gas
        utilities",but affects"the operationof gas pipe lines for buying,
        se~ing,~port~,p~~ing,orothaRisedealinginnataralgae."
                                                                           .
                  The operationscontemplatedby chapter31 undoubtedlyoonsti-
        tute a "dealinginnatural'gas"even thoughsuchoperatiousarenottkse
        of a "gas utility" (by virtueof the exemptioncontainedin Chapter 31).

                  Section 2 of ArtiCle6053; V.C.S.,grsnts the Commission"full
        power and authorityto prescribesuch rules and ragulationsas in its
        wisdcaumaybe deemed necessaryt0 carry out the purposee"of the Eatural
        Gas ht. As the protec.tion,~health,welfare and safetyofthepublio is
        an evidmitR&pose of the Act (Art. 6053),we concludethat the supplier-
        of naturalgas uhdar the provisionsof Chapter31 is within~thejurisdic-
        tion'ofthe RailroadCommissionto the extent that he-mustcomplywith
        all valid rules and regulationsof the C@ssion   which are designedto
        promotethe pzoteotion,health,welfareand safetyof the public.




                  A supplierofnaturalgas;~~pureuant to the $rovisione
             of Chapter 31, ACk 53rd Le&ahture, latC.S, 1954, 16 .
             not a "gas utility"'withinthe povisionrjof Article@C,,~-
             V.C.Si,when the gas suppliedis used exclusivelyfor pump-
             ing water for agriculturalpurpcees.Rot being a "gas utility"
             under such circumstsmes, the supplieris not subjectto the
                                                                  ..




Eon. Ernest Thmpson, page 4 (S-140)



    @ose.reoeiptsti leviedagain& gas utilitiesbj'Article
    606C;B.ti.S.Such &plier'& within the jarisdiction  of
    the Ririlro~'Camis&n, however,to the extent that he
    mustqomplywithallaafetyrolss andregulationsof that
    bo@.
APPROVED:                               Yours very truly,

Phil&~~bins;n                           JOI&&   i3Blmih
Oil and Daa-~Division                   AttorneyGeneralof Texas

L P. Lbllar
Revviewer
    -~      _~
RI@% S. Ttitti                               Mert Stkrnes
FlrstAssistan~       "                       Assistant

JolmBsnSheR+rd
&to~~y General

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