TFTHE SUPREMECOURTOF THE STATE OF MONTANA

NORTHERN BORDER PIPELINE COMPANY, a Partnership, Plaintiffand Appellant,-vsTHE STATE OFMONTANA, DEPARTMENTOF REVENUE, OF THE STATEOF MONTANA, et al.

Defendantsand Respondents.

APPEAL FROM: District Court of the Seventeenth Judicial District, Inand for the County ofValley, The Honorable T,eonard Lanqen,7udqepresidina.

COUNSEL OF RECORD: ForAppellant: Michael E. Webster argued and.Ronald 1,odders;Crowle~7 LawFirm,Billings, Montana

ForRespondent: Hon. Marc Racicot,Attorney General, Helena,Montana Clay Smith argued,Asst. Atty. General,Helena DavidW. Woodgerd, Dept. ofRevenue, Helena,Montana David 

### L. Nielsen,CountyAttornev, Glasgow,Montana JamesA. McCann, County Attorney, Wolf Point,Montana

ForAmicus Curiae: Reid Peyton Chambers; Sonosky,Chambers & Sachse, Fashington,DC and Ray F. Koby; Swanberg,Koby and CO

A3 "Fwanberg,GreatFalls,Montana (Assiniboineand Sioux Y;!Tribes) i.1 

### , : Submitted: February 10,1989 Decided: April 20, 1989where a portion of it crosses "trust lands'' (landsheld by the Federal. Government in trust for members of the Indian tribes) within the Fort Peck Indian Reservation. Inorder to build the line on trust Lands, Northern Border was required to obtain a right-of-way grant from the United States Department of the Interior through the Bureau of Indian Affairs. Prior written consent was also required from the Assiniboine and Sioux Tribes (Tribes)with respect to tribal trust lands, and from individual tribal members with respect to lands held in trust for them. The portion of the pipeline running through reservation trust lands is located in Valley County (12.92miles), and in Roosevelt County (20.88 miles)

# . From the time of its construction, thepipeline hasbeen subject toa property tax centrally assessed by the State. The assessed tax is levied and collected by the Counties. Northern Border haspaid this tax without protest, except for a disagreement in 1986 as to the proper valuation of the line. In 1987,the Tribes instituted a "utility tax," which is basically a property tax levied on utilities. The amount of the tribal tax related to the pipeline running beneath trust lands was $1,112,396.56 in 1987. The 1987 property tax assessed by the State resulted inValley County collecting a total of $2,305,346.05 ($370,794.56ofwhich related to trust lands), and Roosevelt County collecting $2,??1,875.37 (5535,243.85ofwhich related to trust lands). Northern Border filed its Application for Temporarl7 Restraining Order and Complaint for Injunctive Relief on November 23, 1987,requesting that the District Courtpreventthe State from assessing, levying or collecting propertv taxes on the portion ofthe line running beneath trust lands. The amount of Northern Rorder's 1987 property tax therebv challenqed was $906,038.41. The District Court. issued aMr. Justice R. C. McDonough delivered the Opinion of the Court.

This appeal involves a dispute over property taxes assessed and levied against a natural gas pipeline owned by Northern Border Pipeline Company (NorthernBorder). Northern Border appeals from the summary judgment of the District Court of the Seventeenth Judicial District, Valley County, upholding the power of the State of Montana to impose the disputed tax. We affirm. Northern Border frames six issueson appeal: 

### 1. Does the factual record before the District Court show that Northern Border was entitled to summary judgment? 2. Did the District Court err in failing to find that the challenged taxes have been preempted by federal law? 3. Did the District Court commit error in failing to find that the challenged taxes are illegal because thev interfere to an impermissible extent with the Tribes' sovereign rights of self-government? 

### 4. Did the District Court err in determining that the State has a sufficient nexus with the trust-sited property interests of Northern Border to support imposition of the taxes here challenged? 5. Do the challenged taxes constitute an unreasonable burden on interstate commerce? 6. Do the acts 

### of the State in attempting to assess, levy and collect the challenged taxes conflict with the Enabling Act of the State ofMontana and the Constitution of the State? Thepipeline inquestion carries natural gas from Alaska to the lower 48 states. Northern Border owns the line between the Sasketchewan/Montana border and Chicago. Approximately 

### 181 miles 

### of the line is located in Montana,temporary restraining order enjoining collection of the challenged tax, and later granted a preliminary injunction. The parties then filed cross-motions for summary judgment with supporting affidavits. The District Court granted the State's motion and denied Northern Border's. At the outset, we note two important features of this case that have shaped our approach to reviewing the District Court's decision. First, the basis for this suit is a state tax levied againstproperty located on an Indian reservation, but ownedby non-Indians. The arguments involved are complex and sometimes confusing, due to the legalprinciples involved and the attempts of counsel to emphasize particular aspects of those principles. Second, this case was decided below on a motion for summary judgment. The judge satwithout a jury,no testimony

was taken and the facts are relatively uncontested. The scope of our review is therefore much broader than in other appeals. We are able to make our own examination of the entire case and make a determination in accordance with our findings

# . Johnson v. Division of Motor Vehicles (Mont. 1985), 711P.2d 815, 42 St.Rep. 2045. Given the complexity of the arguments and the resulting risk of confusion, we have taken an approach to this case that differs from thatproposed by NorthernBorder. Northern Border's challenge to the taxes imposedby the State restson three basic grounds: (1) preemption by federal law, (2) violation of the United States Constitutionand (3)violation of the Montana Constitution. While the issues framed by Northern Border have relevance, they are component questions of these threemain issues. I. Federal Preemption Northern Border arques that the pipeline running through reservation trust lands is subiect to federal laws andregulations, with which the challenged state property tax will interfere to an impermissible extent. Both sides agree that the test tobe applied in this casewas set forth

### bv the United States Supreme Court in White Mountain Apache Tribev. Bracker (1980),448U.S. 136,100 S.Ct. 2578, 65L.Ed.2d 665. The White Mountain opinion outlines the relationship amonq the Indian tribes, the Federal Government and the several. states. Indian reservations are a creation of federal law. Indian activities and property on a reservation generallv

come within the sphere of federal authority, except in matters where an Indian tribe has retained its tribal sovereignty and is self-governing. A state's laws are therefore generallv inapplicable where the conduct of Indians

onthe reservation is concerned. White Mountain, 448U.S. at 143-44. Where a state seeks to have its laws apply to the activities or property of non-Indians on a reservation, the separation ofauthority is less clear. In White Mountain, the StateofArizona sought to impose fuel use and motor carrier license taxes on trucks owned and operated by a non-Indian company,but used in furtherance of

a contract with a tribal enterprise engaged in logging operations on a reservation. The company and the tribe challenged the portion of Arizona's tax that applied to logging and hauling activities carried out exclusively on the reservation,using tribal and federalroads. The Supreme Court set out essentially a two-pronged test for preemption, because it found that two "independent but related barriers" could preclude a state from asserting its authority on a reservation. First, the exercise of state authority could be preempted by directly applicable federal statutes or regulations. Second, the state could unlawfully infringe on the riqht 

### of Indians to make their own laws andbe governed by them. White Mountain, 448U.S. at 142 (citing Warren Trading Post Co. v. Arizona Tax Cornm'n (1965), 380 U.S. 685, 85 S.Ct 1242, 14 L.Ed.2d 165; and Williams 

### v. Lee

(1959), 358 U.S. 217, 79 S.Ct. 269, 3 L.~d.?d 251, respectively)

# . The Supreme Court noted that these two barriers are independent, because either standing alone could he a sufficient basis for finding a state law inapplicable. Thev

are also related,because the right oftribal self-government is ultimately subject to the power of Conqress, and thus is effectively a creature of federal law iust as are statutes and regulations. We will therefore treat these two separate questions as elements of the same federal preemption analysis. Because the interaction of the various governmental interests in each case will vary, the White Mountain test calls for a "particularized inquir:~into the nature of the state, federal and tribal interests at stake," which are then balanced todetermine whether the state law is preempted. White Mountain, 448U.S. at 145. A. Federal Statutes and Regulations Northern Border asserts that the challenged state tax in this case is preempted by two directly applicable bodies of federal law. The first of these is comprised of statutes enunciating the FederalGovernment's goal ofpromoting tribal self-sufficiency and economic development, specifically, the Indian Financing Act of 1974, 25 U.S.C. §§ 1451 et seq.; the Indian Self-Determination and Education Assistance Act of 1975, 25U.S.C. §§ 450et seq.; and the Indian Reorganization Act of 1934, 25U.S.C. §§ 461et seq. For example:
The Congress hereby recognizes the obligation of the United States to respond to the strong expression of the Indian people for self-determination

# ...through the establishment of a meaningful Indian self-determination policy whichwill permit an orderly transition from Federal domination of programs for and services to Indians to effective and meaningful participation by the Indian people in the planning, conduct, and administration of those programs and services.
25U.S.C. § 450a.

It is hereby declared tobe the policy of Congress to provide capital on a reimbursablebasis to help developand utilize Indianresources,both physical and human, to a pointwhere the Indianswill fully exercise responsibility for the utilization and management of their own resources and where they will- enjoy a standard of living from their own productive efforts comparable to that enioyed by non-Indians inneighboring communities.

25U.S.C. 5 1451.

The secondbody of law is the scheme of regulationsgoverning the granting of rights-of-way over Indian lands found at 25 C.F.R. S§ 169.1,et seq. Thepurpose of these regulations is stated in 25 C.F.R. § 169.2 as prescribing the "procedures, terms and conditions" under which rights-of-way 

### can be granted across tribal land. Two of the seminal cases in this area, relied upon by both parties in this case, are White Mountain and Washington

v. Confederated Tribes of the Colvil!.e Reservation (19801, 447 U.S. 134, 100 S.Ct. 2069, 65 L.Ed.2d 10. The result in each case was different, which allows for an examination of the interests that will cause the balance to tip one way or the other. An overview of these cases shows that the federal/tribal interest will be strongest, and the state interest correspondingly weakest, where the activitv or property at issue involves only Indiansand 

### is located solely within the reservation. The reverse is true when the activity or property involves non-Tndians and has effectsthat are felt off the reservation. See White Mountain, 448 U.S. at 144;Colville, 447U.S. at 154-57. In White Mountain, the logging operation at issue was conducted exclusively on reservation lands,using roadsbuilt

or maintained by the White Mountain Tribe and the Federal Government. The Supreme Courtnoted the generalpolicy goals contained in the statutes cited above, and examined the extensive federal lawsand regulationsdirectly applicable to the logging operation. The regulations dictated, among other things, the amount of timber that could be sold, methods of cutting trees, advertising, mode of bidding, roads to be used, hauling equipment to be used, speed atwhich equipment could travel,and dimensions of the loads tobe hauled. The Supreme Court found Arizona

### 's justification for its taxes insufficient to counterbalancetheir interference with the applicable federal regulatory scheme. Arizona did not assert a public regulatory purpose; i.e., the challenged taxes were not used to address off-reservation effectsof the logging operation. The revenue raised by the taxes was used for "partially compensating the state for the use of its highwavs. " White Mountain, 448 U.S. at 139-40. Arizona's interest in imposing the taxeswas held to be slight due to the lack of a public regulatory purpose and the fact that Arizona was not providing any on-reservation services with the revenue from the challenqed taxes. The logginq trucks involved did notuse state roads orhighways. By contrast,theArizona taxesadded a cost component to the logging operation that interfered with three facets of the federal statutory and regulatory scheme: 

### (1) the "overriding federal ob-jective of guaranteeing Indians that they will 'receive

# ... the benefit of whatever profit [the forest] is capable of vielding;''I (2) the FederalGovernment's ability to set fees and rates required to carryout logging operations and timber sales;and (3)the tribe's ability to sustain the costs involved in following the federally-mandated sustained yieldpolicy. The Supreme Court found that "no room remains for state laws imposing additional burdens" on the l.ogging operation. White Mountain, 448U.S. at 149-52. In Colville, the tribes involved enacted ordinances authorizing the taxation of on-reservation cigarette sales. The tribes refused to collect Washington cigarette or sales taxes on the transactions. Thismade the price of cigarettes purchased on the reservation lower than those purchased elsewhere, and non-Indianpeople traveled to the reservation for the specific purpose ofbuying cigarettes. The Supreme Court found this case to be in contrastto a situation (such as that in White Mountain) where the challenged tax affectedvalue generated on the reservationby activities inwhich the tribes had a strong interest. "What the smokeshops offer these customers 

# ... is solely an exemption from state taxation." Colville, 447 U.S. at 155

(contrastingMoe v. Salish and Kootenai Tribes (1976), 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96; and McClanahan 

### v. Arizona State Tax Comrn'n (1973),411U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129). The Colville tribes had argued that Washington's taxes

were preempted by the policy of Indian self-sufficiency set out in the statutes quoted above. The Supreme Court held that the general policy of self-sufficiencywas insufficient to outweigh Washington's interest in raising revenue through its sales and cigarette taxes. The statutes were held tobe evidence of "congressional concern with fostering tribal self-government and economic development, but none [went] so far as to grant tribal enterprises selling goods to

### nonmembersanartificial competitive advantage over all other businesses in the State." Col-ville,447

### U.S. at 155. In the present case, both parties have examined precedent such as White Mountain and ColvilZe closely in seeking to add weight to their respective interests. For example, in its briefs to the District Court and to this Court,Northern Border quotes an opinion of the Tenth Circuit Court of Appeals for the proposition that a state's interest in assessing a tax is "particularlyminimalwhen it seeks to raise revenue by taking advantage of activities that are wholly created and consumed within tribal lands and over which it has no control." Indian Country U.S.A., Inc. v. State ex rel. OklahomaTax Comm'n (10thCir. 1988), 829 F.2d 967, 987. Northern Border then argues that because the portion of the pipeline in question is on trust lands "over which the State has no jurisdiction,"Montana's interest in raising revenue is likewise particularly minimal. This argument ignores the fact that Northern Border's pipeline--part of a system stretching from Alaska to Illinois--can hardly be characterized as "wholly created and consumed within tribal lands." It also presupposes the result of the White Mountain test, which will determine whether the State has a sufficient interest to assert jurisdiction to tax Northern Rorder's trust land-sited pipeline. The State has also engaged in overstatement. For example, the State seeks to derive a rule fromholdings such

as Colville and White Mountain that direct interference with

a particular federal regulatory scheme is necessary before preemption canbe found. However, the Supreme.Courtin White Mountain stated that the balancing of federal, tribal and state interests was to include consideration of the broad policies that underlie relevant federal laws. White

### Mountain, 448 U.S. at 144-45. While Colville held broad federal policy insufficient to preempt the state law at issue,itwasnonethelessconsidered as themain component of the tribes' argument. Colville, 447U.S. at 155. A 

### specific federal regulatory scheme would yield a federal/tribal interest that weighed more heavily in the White Mountain test, but it is not a prerequisite for federal preemption. Unlike the decisions in White Mountain and Colville,the balance of federal,tribal and state statutory and regulatory interests in this case has a narrow focus. This is not a case where an extensive set of directly applicable federal statutes or regulations leaves no room for the exercise of state authority challenged here. Nor is it a case where the Tribes are attempting to gain a commercial advantage by marketing an exemption from state taxation. As to the federal/tribal interests, one basis for Northern Border's argument merits much more weight than the other. Theweaker basis is the schemeof federalregulations concerningright-of-waygrants across reservation lands. The State and the District Court agree that this regulatory system is fairly extensive, but Northern Border makes only bald statements that the State's tax is preempted by the regulations, without showing any actual relationshipbetween the two. The activity being regulated is the granting of rights-of-way. The State does not seek to tax the right-of-way itself or any facet of the granting process. The State's tax is on the pipeline; the property ofNorthern Border that was notput inplace until after the right-of-way grant was obtained. While it is conceivable that some decision made regarding a future right-of-way grant might be somehow affected by the tax,Northern Border has advanced no argument as to what that effect might be. The regulations

### are at best tangentially related to a property tax on a pipeline sitting in an existing right-of-way. The federal/tribal interests represented by the right-of-way regulations are slight, and can be accorded little weight. Northern Border's stronger argument is based on the federalpolicy of encouraging tribal self-sufficiency setout in the statutes quoted above. In its initial brief to the District Court, Northern Border argued that the Tribes' utility tax ordinance,by providing revenue for theTribesto

use inproviding services on the reservation,was effectively furthering this federalpolicy. Northern Border argues that the State's tax makes it more expensive for utilities to locate property on trust lands than it is elsewhere. According to Northern Border, this gives the State thepower to control amajor factor in any decision to locate business property on the reservation. This would interfere with the federal self-sufficiency policy by inhibiting the Tribes' ability to manage their own resources (see New Mexico v. Mescalero Apache Tribe (1983),462U.S. 324, 103 S.Ct. 2378, 76 L.Ed.2d 611), and by reducing the revenue available for providing reservation services. However, as the State is quick to point out, no present injury to tribal revenues resulting from the State'staxhasbeen shown. Northern Border presents factual support for its position in the form of affidavits from utility company executives who state that the double tax burden present on trust lands would affect any decision by their companies regarding location of facilities there. The State attacks these affidavits as speculative and irrelevant. While there is some merit to the State's attack, the prospective nature of Northern Border's argument does not render it inconsequential. The law recognizes that one need not wait for a 

### threatened iniury to manifest itself before seeking

### injunctive or declaratory relief. Crow Tribe v. State of Montana (9thCir. 1987), 819 F.2d 895, 903. The State's interest in assessing the challenged tax is similar to the Tribes'. The State argues that substantiallv all of the revenues derived from the tax stay in Roosevelt and Valley Counties, with a full 71% 

### being used to fund school districts servicing tribal members living on the reservation. The Statealso notes that the Counties maintain

some of the roads on the reservation,and that the State has lawenforcement responsibilities for some crimes committedby non-Indians on the reservation, including acts of vandalism againstNorthern Border'sproperty., The balance of the competing interests here as they apply to preemption by federal laws thus narrows to the question of providing services. Although both sides have advanced viable interests tobe weighed in theWhiteMountain test, the State's interest in funding the school districts involved here and providing local services outweighs the federal/tribal interests asserted by Northern Border. The possible future injury posed by Northern Border has less impact than whatwould occur were we to hold the State's tax to be preempted. For example, any failure by the State to provide educational opportunity for reservation children would violate both federal and state law. See, e.g.

## ,Equal Educational Opportunities Act of 1974, 20 U.S.C. 

### 55 1701,et seq.; Sec. 1,Art. XI

### Mont.Const.; 55 

### 20-5-103 and 20-5-108, MCA

# . The deciding factor is thus the greater present interest the State has in providing services to reservation residents. We therefore hold that the challenged tax is not preemptedby federal statutes or regulations. B. 

### Tribal Self-Government Northern Border also argues that the State's tax interferes to an impermissible extent with the Tribes'sovereign rights of self-government. According to Northern Border,the interference with prospective tribal tax revenues wrought bv the State's tax requires a finding of preemption under the second prong of the White Mountain test, because taxation is chief among the powers of sovereignty exercised by an Indian tribe. The District Court's order noted that the Tribes, and not Northern Border, are the more appropriate parties to determine whether their interests will be harmed in the futureby the challenged tax. On appeal, the State amplifies thispoint, and argues thatNorthern Border lacks standing to raise a self-governmentclaim. The Statepoints to Olson

### v. Department of Revenue (Mont. 1986), 726 P.2d 1162, 1166, 43 St.Rep. 1916, 1920, where this Court adopted federal principles of standing for suits of all kinds, especially court challengesbased on alleged constitutional or statutory violation. In Olson, we recognized two bases on which standing rests. One of these is "judicial self-restraint imposed for reasons of policy." Olson, 726 P.2d at 1166. The policy at issuehere is the general reluctanceof courts todetermine the rights ofpersonswho are notparties to the suit:

# "...the avoidance of the adiudication of rights which those not before the Court may not wish to assert, and the assurance that the most effective advocate of the rights at issue is present to champion them." Duke Power Co. v. Carolina Environmental Studv Group., Inc. (1978), 438 U.S. 59, 80, 98S.Ct. 2620, 2634, 57L.Ed.2d 595, 616. Northern Border argues that ithas standing to bring the claims advanced in this suitby virtue of its taxpayer status and the direct economic injurv it suffers from the double taxation. Northern Border furtherargues that this Court has previously addressed self-government issues in caseswhereno Indian tribes were parties (citing Burlington NorthernRailroad v. Department of Public Services Regulation (Mont. 1986), 720 P.2d 267, 43 St.Rep. 1005; and ~ilbank~utual Insurance Co. v. Eagleman (Mont. 19851, 705 P.2d 1117, 42 St.Rep. 1393). Our reading of these cases shows Northern Border's argument to be incorrect. Our decision in Burlington Northern was based on applicable federal regulations, and did not address self-government. The plaintiff in Eagleman, while technically not an "Indian tribe," was an individualwhowas "an enrolledmember of the Fort Peck Sioux and Assiniboine Tribes." Eagleman, 705 P.2d at 1118. Northern Border also cites two recent state court decisions, one fromArizona and one fromNew Mexico, for the proposition that consideration of a federal preemption claim necessarily includes consideration of self-government, thereby affording standing for a non-Indian to assert a self-government claim. We disagree with these holdings, and decline to apply them. Northern Border has standing by virtue of its taxpayer status to challenge the property tax imposed on it by the State. However, it does not have standing to assert the Tribes' sovereign right of self-government in doing so. As

we noted in Olson, the principle 

### of standing requires that the plaintiff allege "'such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues

# . . . .'"Olson, 726 P.2d at 1166 (quoting Raker v. Carr (1962), 369 U.S. 186, 204, 82S.Ct. 691, 703, 7L.Ed.2d 663, 678). Northern Border cannot allege a sufficient "personal" stake in the self-government interests of the Tribes to gain standing on this claim. Having so found,wewill not address the claim's merits.11.Violation of United StatesConstitution Northern Border asserted in its Application for Temporary Restraining Order and Complaint for Injunctive Relief that the challenged tax violates three provisions of the United States Constitution: the Due Process and Equal Protection Clauses of the Fourteenth Amendment, and the Indian CommerceClause. Bevond these initialall-egations,we find nothing in the various briefs submitted by Northern Border that purports to be an equal protection argument. Because our review of the facts shows no objectionable cl-assificationon which to base such a claim, we will not address it further. The Due Process Clause claim appears to be based on the alleged lack of nexus between the State and that portion of the pipeline crossing trust lands. The State characterizes this argument as specious, owing to the fact that the trust lands are located within the boundaries ofMontana. Without passing on whether Northern Border has advanced a specious argument,we decline tohold that the challenged tax violates constitutional due processguarantees. A leadingU.S. Supreme Court decisionon state taxation, Container Corp. v. Franchise Tax Board (1983),463 U.S. 159, 165-66, 103 S.Ct. 2933, 2940,

### 77 L.Ed.2d 545, 553-54, defines

nexus as a "minimum connection" between the State's income from the tax and the instate value of the enterprise being taxed. The tax here at issue is assessed based on the value of thepipeline foundwithin the State. The revenueobtained is used toprovide government servicesto Northern Border and tribal members, among others. This is sufficient nexus to withstand the due process challenge advanced by Northern Border. Northern Border next argues that the State's tax is violative of the Indian Commerce Clause under the four-parttest established in Complete Auto Transit, Inc. v. Brady (1977), 430 U.S. 274, 97S.Ct. 1076, 51 L.Ed.2d 326. First, the test in Complete Auto applies to the Interstate Commerce Clause (Art. 

### I, Sec. 8, c1.2, U.S.Const.), not the ~ndian Commerce Clause (Art.I,Sec. 8,cl. 3,U.S.Const.). Second,

as the Supreme Court stated inColville, "Itcan no longerbe seriously argued that the Indian Commerce Clause, of its own force, automatically bars all state taxation of matters significantly touching the political and economic interests of the Tribes." It would, however, have a role in "preventing undue discrimination against, or burdens on, Indian commerce." Colville, 447 U.S. at 157. Northern Border's allegations of future injury to tribal revenues do not rise to the level of undue discrimination or burden on Indian commerce. Moreover, the Colville court found Washington's tax acceptable under this analysis because it

was imposedwithout discriminationon all transactions within the state. The tax at issue here is alleged by Northern Border to be improper for that very reason. It is assessed against the pipeline based on its value without regard to where the line is located.within the State. We find no Indian CommerceClause violation present in this case. 111.Violation of the Montana Constitution Northern Border's claim under the Montana Constitution is confined to the incorporation ofMontana's Enabling Act in Article I:
All provisions of the enabling act of Congress

(approved February 22, 1889, 25 Stat. 676), as amended and of Ordinance No. 1, appended to the Constitution 

### of the state of Montana and approved February 22, 1889, including the agreement and declaration that all lands owned or held by any Indian or Indian tribes shall remain under the absolute jurisdiction and control of the congress of the United States, continue in full force andeffect until revoked by the consent of the United States and thepeople ofMontana.
The delegates to the 1972 Constitutional Convention stated their intent during debate that this provision should be included to show that the Enabling Act, the "contract" between Montana and the Federal Government, was still in force under the 1972 Constitution. VII Mont. Leg. Council, Montana Constitutional Convention, 1971-1972, 2567 (1981). The U.S. Supreme Court has held that through enabling acts, the states surrendered their proprietary interests in tribal lands, but not necessarily their governmental or regulatory authority. See Colville, 447U.S. at 156; Draper

v. United States (1896),164U.S. 240. As we held above,the White Mountain test establishes Montana's jurisdiction to assess the tax here challenged. That jurisdiction is not defeatedbyArt. I,Mont.Const. After reviewing the record and the briefs to this Court,

we find that Northern Border has not asserted federal/tribal interests sufficient to outweigh the State's interest in raising revenue for required government services encompassing reservation residents, and lacks standing to assert the Tribes' interests in self-government. We conclude that the challenged tax isnotpreempted by federal law. We alsohave been unable to find constitutional barriers to the challenged tax,and conclude that it is therefore constitutional. Given these conclusions,we hold that there is no issue as to any factmaterial to the State's entitlementto summary judgment. We affirm the decisionof the DistrictCourt.

We Concur:Justices

### Mr. JusticeFred J.

### Weber specially concursas follows:

I 

### commend the majority for a well analyzed and well. written opinion. Based on previous case law, the majority has properly struck a balance. Unfortunately,we have been unable to address the fundamental issue of fairness in the present case. Here we have double taxation. After the completion of the pipeline, the State levied its property tax of approximately $33,000 for each mile of pipeline on the reservation. Essentially the State levied the same tax as would have been levied if the pipeline were located off the reservation in the State ofMontana. Northern Border did not protest sucha tax as it apparently concluded that a single tax of that nature was appropriate. After several years, the Tribes became aware

### of an opportunityto levya similarproperty tax for their own direct use and benefit. Such a Tribal tax was appropriate because the pipeline was located on the reservation land. The Tribesthen imposed their ownproperty tax of approximately $33,000 per mile for each mile of pipeline on the reservation, resulting in an additional annual tax to Northern Border of approximately 

### $1 million each year. Had Northern Border constructed its pipeline south of the reservation, therewould only have been a single tax. Now Northern Border is trapped with a double tax resulting from the taxing ingenuity of two independent taxing entities. Northern Border properly feels it should have a judicial forum where thisunfairnesscan be reviewed. Unfortunately our state judicial system is unable to address that issue of fairness. Our jurisdiction does not extend to any control over the Tribal lands nor of the Tribe's annual tax of approximately $1

### million. We therefore 

### cannotconsiderthe tax ofboth the Stateand t.heTribes. We

### can only state that the Montana tax is appropriate. Where does that leaveNorthernBorder? As a result of this opinion, Northern Border cannot obtain consideration of the issue in our State judicial system. Can Northern Border next go to the federal court system? Clearly the answer again is, "No." If Northern Border proceeds in federal court, that court system would undoubtedly agree that kt has the authority to consider the tax h17 the Tribes only, hut that it cannot consider the tax imposed by the State of Montana. The result again would he that the double tax could notbe considered. Clearly this i-s unfair to thetaxpayer. Northern Border argues that thedouble taxwill adversely effect the economic de~~elopment of the reservation. The State argues that the issue cannot be presented by Northern Border as a 

### taxpayer because this is a matter which can be 

### presented only by the Tribes who are not parties to the action. It appears that the majority is correct in not addressing the issueas to the adverse effect on the economic development of the reservation. Again there is an elementof 

### unfairness. Without question therewill be an impact on the reservations of Montana in the future. Economic development on the Indian reservations will he reduced. Non-Indians, whether corporate or individ-ual,will 

### - not construct taxableproperty

on an Indian reservation if it is possible to place that property outside a reservationboundary. Themessage to the business community is to avoid transactions on the reservations which may be subject to such a double tax. Tragicallv the resultwill be a greater separation of the Tndian reservations from the remainderof the State ofMontana. Montana lacks the power to address all aspects of this di

### lemma. It becomes one 

### more unfortunate aspect of theIndian problem which remains to be addressed by the Congress of theUnited States. I concur in the majority opinion. Yet I also conclude that iustice has been denied.