TF THE SUPREME COURT OF THE STATE OF MONTANA 

NORTHERN BORDER PIPELINE COMPANY, 

a Partnership, 

Plaintiff and Appellant, 

-vsTHE STATE OF MONTANA, DEPARTMENT OF REVENUE, 

OF THE STATE OF MONTANA, et al. 

Defendants and Respondents. 

APPEAL FROM: District Court of the Seventeenth Judicial District, 

In and for the County of Valley, 

The Honorable T,eonard Lanqen, 7udqe presidina. 

COUNSEL OF RECORD: 

For Appellant: 

Michael E. Webster argued and. Ronald 1,odders; Crowle~7 

Law Firm, Billings, Montana 

For Respondent : 

Hon. Marc Racicot, Attorney General, Helena, Montana 

Clay Smith argued, Asst. Atty. General, Helena 

David W. Woodgerd, Dept. of Revenue, Helena, Montana 

David L. Nielsen, County Attornev, Glasgow, Montana 

James A. McCann, County Attorney, Wolf Point, Montana 

For Amicus Curiae: 

Reid Peyton Chambers; Sonosky, Chambers & Sachse, 

Fashington, DC and Ray F. Koby; Swanberg, Koby and 

CO 

A 3 "Fwanberg, Great Falls, Montana (Assiniboine and Sioux Y ;!Tribes) 

i.1 , 

: 

Submitted: February 10, 1989 

Decided: April 20, 1989 
where a portion of it crosses "trust lands'' (lands held by 

the Federal. Government in trust for members of the Indian 

tribes) within the Fort Peck Indian Reservation. In order 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 (12.92 miles), and in 

Roosevelt County (20.88 miles) . From the time of its 

construction, the pipeline has been subject to a property tax 

centrally assessed by the State. The assessed tax is levied 

and collected by the Counties. Northern Border has paid 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 in Valley County collecting a 

total of $2,305,346.05 ($370,794.56 of which related to trust 

lands), and Roosevelt County collecting $2,??1,875.37 

(5535,243.85 of which 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 Court preventthe State from assessing, levying or collecting propertv 

taxes on the portion of the line running beneath trust lands. 

The amount of Northern Rorder's 1987 property tax therebv 

challenqed was $906,038.41. The District Court. issued a 
Mr. 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 (Northern Border). 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 issues on 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 of Montana and the Constitution of 

the State? 

The pipeline in question 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 against property located on an Indian reservation, 

but owned by non-Indians. The arguments involved are complex 

and sometimes confusing, due to the legal principles 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 sat without 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), 711 P.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 that proposed by Northern Border. Northern 

Border's challenge to the taxes imposed by the State rests on 

three basic grounds: (1) preemption by federal law, (2) 

violation of the United States Constitution and (3) violation 

of the Montana Constitution. While the issues framed by 

Northern Border have relevance, they are component questions 

of these three main issues. 

I. Federal Preemption 

Northern Border arques that the pipeline running through 

reservation trust lands is subiect to federal laws and 
regulations, with which the challenged state property tax 

will interfere to an impermissible extent. Both sides agree 

that the test to be applied in this case was set forth bv the 

United States Supreme Court in White Mountain Apache Tribe v. 

Bracker (1980), 448 U.S. 136, 100 S.Ct. 2578, 65 L.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 

on the reservation is concerned. White Mountain, 448 U.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 of authority is less clear. 

In White Mountain, the State of Arizona 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 federal roads. 

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 and 
be governed by them. White Mountain, 448 U.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 of tribal 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 to determine whether the state law is 

preempted. White Mountain, 448 U.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 Federal Government's goal of promoting 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, 25 U.S.C. §§ 450 et seq.; and the Indian Reorganization 

Act of 1934, 25 U.S.C. §§ 461 et 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 which 
will 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. 

25 U.S.C. § 450a. 

It is hereby declared to be the policy of Congress 

to provide capital on a reimbursable basis to help 

develop and utilize Indian resources, both physical 

and human, to a point where the Indians will 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 in neighboring communities. 

25 U.S.C. 5 1451. 

The second body of law is the scheme of regulations governing 

the granting of rights-of-way over Indian lands found at 25 

C.F.R. S§ 169.1, et seq. The purpose 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 Indians and is located solely 

within the reservation. The reverse is true when the 

activity or property involves non-Tndians and has effects 
that are felt off the reservation. See White Mountain, 448 

U.S. at 144; Colville, 447 U.S. at 154-57. 

In White Mountain, the logging operation at issue was 

conducted exclusively on reservation lands, using roads built 

or maintained by the White Mountain Tribe and the Federal 

Government. The Supreme Court noted the general policy goals 

contained in the statutes cited above, and examined the 

extensive federal laws and regulations directly 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 at which equipment 

could travel, and dimensions of the loads to be hauled. 

The Supreme Court found Arizona ' s justification for its 

taxes insufficient to counterbalance their 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 effects of 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 taxes was 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 not use state roads or highways. 

By contrast, the Arizona taxes added 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 carry 
out logging operations and timber sales; and (3) the tribe's 

ability to sustain the costs involved in following the 

federally-mandated sustained yield policy. The Supreme Court 

found that "no room remains for state laws imposing 

additional burdens" on the l.ogging operation. White 

Mountain, 448 U.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. This made the price of cigarettes 

purchased on the reservation lower than those purchased 

elsewhere, and non-Indian people traveled to the reservation 

for the specific purpose of buying cigarettes. 

The Supreme Court found this case to be in contrast to a 

situation (such as that in White Mountain) where the 

challenged tax affected value generated on the reservation by 

activities in which 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 

(contrasting Moe 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), 411 U.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-sufficiency was insufficient 

to outweigh Washington's interest in raising revenue through 

its sales and cigarette taxes. The statutes were held to be 

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 
nonmembers an artificial 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 "particularly minimal when 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. Oklahoma Tax Comm'n (10th Cir. 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 from holdings such 

as Colville and White Mountain that direct interference with 

a particular federal regulatory scheme is necessary before 

preemption can be found. However, the Supreme.Court in 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, it was nonetheless considered as the main component of 

the tribes' argument. Colville, 447 U.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. The weaker basis is the scheme of federal regulations 

concerning right-of-way grants 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 relationship between 

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 of Northern 

Border that was not put in place 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 

federal policy of encouraging tribal self-sufficiency set out 

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 the Tribes to 

use in providing services on the reservation, was effectively 

furthering this federal policy. 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 the power 

to control a major 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), 462 U.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's tax has been 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 (9th Cir. 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 State also notes that the Counties maintain 

some of the roads on the reservation, and that the State has 

law enforcement responsibilities for some crimes committed by 

non-Indians on the reservation, including acts of vandalism 

against Northern Border's property., 

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 to be weighed in the White Mountain 

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 what would 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 

preempted by 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 

future by the challenged tax. On appeal, the State amplifies 

this point, and argues that Northern Border lacks standing to 

raise a self-government claim. The State points 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 challenges based 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 issue here is the general reluctance of courts 

to determine the rights of persons who are not parties 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, 98 S.Ct. 2620, 2634, 57 L.Ed.2d 595, 616. 

Northern Border argues that it has standing to bring the 

claims advanced in this suit by virtue of its taxpayer status 

and the direct economic injurv it suffers from the double 

taxation. Northern Border further argues that this Court has 

previously addressed self-government issues in cases where no 

Indian tribes were parties (citing Burlington Northern 
Railroad 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 individual who was "an enrolled member of the 

Fort Peck Sioux and Assiniboine Tribes." Eagleman, 705 P.2d 

at 1118. Northern Border also cites two recent state court 

decisions, one from Arizona and one from New 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, 82 S.Ct. 691, 703, 7 L.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, we will not address the claim's 

merits. 
11. Violation of United States Constitution 

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 Commerce Clause. Bevond these initial all-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-assification on 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 of Montana. Without 

passing on whether Northern Border has advanced a specious 

argument, we decline to hold that the challenged tax violates 

constitutional due process guarantees. 

A leading U.S. Supreme Court decision on 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 the pipeline found within the State. The revenue obtained 

is used to provide government services to 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-part 
test established in Complete Auto Transit, Inc. v. Brady 

(1977), 430 U.S. 274, 97 S.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 in Colville, "It can no longer be 

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 imposed without discrimination on 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 Commerce Clause violation present in this case. 

111. Violation of the Montana Constitution 

Northern Border's claim under the Montana Constitution 

is confined to the incorporation of Montana'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 and 
effect until revoked by the consent of the United 

States and the people of Montana. 

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, 447 U.S. at 156; Draper 

v. United States (1896), 164 U.S. 240. As we held above, the 

White Mountain test establishes Montana's jurisdiction to 

assess the tax here challenged. That jurisdiction is not 

defeated by Art. 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 is not preempted by federal law. We also have 

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 

fact material to the State's entitlement to summary judgment. 

We affirm the decision of the District Court. 

We Concur: 
Justices 
Mr. Justice Fred J. Weber specially concurs as 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 of Montana. Northern Border did not protest such a 

tax as it apparently concluded that a single tax of that 

nature was appropriate. After several years, the Tribes 

became aware of an opportunity to levy a similar property tax 

for their own direct use and benefit. Such a Tribal tax was 

appropriate because the pipeline was located on the reservation land. The Tribes then imposed their own property 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, there would 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 this unfairness can 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 

cannot consider the tax of both the State and t.he Tribes. We 
can only state that the Montana tax is appropriate. Where 

does that leave Northern Border? 

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 not be considered. Clearly this i-s 

unfair to the taxpayer. 

Northern Border argues that the double tax will 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 issue as to the adverse effect on the economic 

development of the reservation. Again there is an element of 

unfairness. 

Without question there will 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 taxable property 

on an Indian reservation if it is possible to place that 

property outside a reservation boundary. The message to the 

business community is to avoid transactions on the reservations which may be subject to such a double tax. Tragicallv 

the result will be a greater separation of the Tndian reservations from the remainder of the State of Montana. 

Montana lacks the power to address all aspects of this 

di lemma. It becomes one more unfortunate aspect of the 
Indian problem which remains to be addressed by the Congress 

of the United States. 

I concur in the majority opinion. Yet I also conclude 

that iustice has been denied.