Clajon Gas Co., L.P., Aquila Gas Pipeline Corp., Tax Matters Partner - Page 36

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          II. The Plain Meaning of Asset Class 13.2 Controls                          
               I agree with the analysis and conclusion of the Court of               
          Appeals for the Tenth Circuit in reversing Duke Energy Natural              
          Gas Corp. v. Commissioner, 109 T.C. 416 (1997) (Duke Energy I),             
          revd. 172 F.3d 1255 (10th Cir. 1999) (Duke Energy II).  The Court           
          of Appeals correctly refused to incorporate an ownership                    
          requirement into the phrase “used by” in asset class 13.2.  Id.             
          The court stated:  “The literal terms of [asset class 13.2]                 
          include any gathering system, so long as it is used by a gas                
          producer.”  Id. at 1259.  Contrary to our opinion in Duke Energy            
          I, the Court of Appeals concluded that gathering systems owned by           
          a nonproducer were “‘used by’ producers through contractual                 
          arrangements”.  Id.  Our holding in Duke Energy I should be                 
               The central issue is whether the gathering systems were                
          “used by” producers.  Absent some ambiguity, the plain meaning of           
          a statute or regulation controls its interpretation.  “Use” is              
          not a difficult word to interpret or understand.  See Black’s Law           
          Dictionary 1541 (6th ed. 1990) (defining “use” as follows:  “to             
          convert to one’s service; to employ; to avail oneself of; to                
          utilize; to carry out a purpose or action by means of; to put               
          into action or service, especially to attain an end”).  The                 
          majority’s holding that the gathering system must be owned by               

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