Source: https://www.legalcrystal.com/case/105303/merrion-vs-jicarilla-apache-tribe
Timestamp: 2017-04-27 11:47:10
Document Index: 296759144

Matched Legal Cases: ['§ 461', '§ 16', '§ 476', '§ 396', '§ 3', '§ 398', '§ 398', '§ 398', '§ 398', '§ 110', '§ 3320', '§ 476', '§ 1', '§ 476', '§ 171', '§ 396', '§ 3320', '§ 8', '§ 3', '§ 397', '§ 461', '§ 396', '§ 5', '§ 1301', '§ 1302', 'Art. 5', 'Art. 7', 'Art. 15', 'Art. 7', 'Art. 15', 'art 2', '§ 396']

Merrion Vs Jicarilla Apache Tribe - Citation 105303 - Court Judgment | LegalCrystal
Save as PDF Add a Tag Add a Note Semantics Visualize Merrion Vs. Jicarilla Apache Tribe - Court Judgment	LegalCrystal Citationlegalcrystal.com/105303CourtUS Supreme CourtDecided OnJan-25-1982Case Number455 U.S. 130AppellantMerrionRespondentJicarilla Apache TribeExcerpt:
merrion v. jicarilla apache tribe - 455 u.s. 130 (1982)
respondent indian tribe, pursuant to its revised constitution (which had been approved by the secretary of the interior (secretary) as required by the indian reorganization act of 1934), enacted an ordinance (also approved by the secretary) imposing a severance tax on oil and gas production on the tribal reservation land. oil and gas received by the tribe as in-kind..... Judgment:
1. The Tribe has the inherent power to impose the severance tax on petitioners' mining activities as part of its power to govern and to pay for the costs of self-government. Pp.
455 U. S. 136
the privilege of carrying on business on the reservation, benefit from police protection and other governmental services, as well as from the advantages of a civilized society assured by tribal government. Under these circumstances, there is nothing exceptional in requiring petitioners to contribute through taxes to the general cost of such government. The mere fact that the Tribe enjoys rents and royalties as the lessor of the mineral lands does not undermine its authority to impose the tax. Pp.
(b) Even if the Tribe's power to tax were derived solely from its power to exclude non-Indians from the reservation, the Tribe has the authority to impose the severance tax. Non-Indians who lawfully enter tribal lands remain subject to a tribe's power to exclude them, which power includes the lesser power to tax or place other conditions on the non-Indian's conduct or continued presence on the reservation. The Tribe's role as commercial partner with petitioners should not be confused with its role as sovereign. It is one thing to find that the Tribe has agreed to sell the right to use the land and take valuable minerals from it, and quite another to find that the Tribe has abandoned its sovereign powers simply because it has not expressly reserved them through a contract. To presume that a sovereign forever waives the right to exercise one of its powers unless it expressly reserves the right to exercise that power in a commercial agreement turns the concept of sovereignty on its head. Pp.
455 U. S. 144
(c) The Federal Government did not deprive the Tribe of its authority to impose the severance tax by Congress' enactment of the 1938 Act establishing the procedures for leasing oil and gas interests on tribal lands. Such Act does not prohibit the Tribe from imposing the tax when both the tribal Constitution and the ordinance authoring the tax were approved by the Secretary. Nor did the 1927 Act permitting state taxation of mineral leases on Indian reservations divest the Tribe of its taxing power. The mere existence of state authority to tax does not deprive an Indian tribe of its power to tax. Moreover, the severance tax does not conflict with national energy policies. To the contrary, the fact that the Natural Gas Policy Act of 1978 includes taxes imposed by an Indian tribe in its definition of costs that may be recovered under federal energy pricing regulations indicates that such taxes would not contravene such policies, and that the tribal authority to do so is not implicitly divested by that Act. Pp.
455 U. S. 149
2. The severance tax does not violate the "negative implications" of the Commerce Clause. Pp.
455 U. S. 152
tax can take effect, and, in this case, the severance tax was enacted in accordance with this congressional scheme. Pp.
455 U. S. 154
MARSHALL, J., delivered the opinion of the Court, in which BRENNAN, WHITE, BLACKMUN, POWELL, and O'CONNOR, JJ., joined. STEVENS, J., filed a dissenting opinion, in which BURGER, C.J., and REHNQUIST, J., joined,
455 U. S. 159
Pursuant to long-term leases with the Jicarilla Apache Tribe, petitioners, 21 lessees, extract and produce oil and gas from the Tribe's reservation lands. In these two consolidated cases, petitioners challenge an ordinance enacted by the Tribe imposing a severance tax on "any oil and natural gas severed, saved and removed from Tribal lands."
Oil and Gas Severance Tax No. 77-0-02, App. 38. We granted certiorari to determine whether the Tribe has the authority to impose this tax, and, if so, whether the tax imposed by the Tribe violates the Commerce Clause.
The Jicarilla Apache Tribe resides on a reservation in northwestern New Mexico. Established by Executive Order in 1887, [
] the reservation contains 742,315 acres, all of which are held as tribal trust property. The 1887 Executive
Order set aside public lands in the Territory of New Mexico for the use and occupation of the Jicarilla Apache Indians, and contained no special restrictions except for a provision protecting preexisting rights of bona fide settlers. [
] Approximately 2,100 individuals live on the reservation, with the majority residing in the town of Dulce, N.M., near the Colorado border.
The Tribe is organized under the Indian Reorganization Act of 1934, ch. 576, 48 Stat. 984, 2 U.S.C. § 461
which authorizes any tribe residing on a reservation to adopt a constitution and bylaws, subject to the approval of the Secretary of the Interior (Secretary). [
] The Tribe's first Constitution, approved by the Secretary on August 4, 1937, preserved all powers conferred by § 16 of the Indian Reorganization Act of 1934, ch. 576, 48 Stat. 987, 25 U.S.C. § 476. In 1968, the Tribe revised its Constitution to specify:
To develop tribal lands, the Tribe has executed mineral leases encompassing some 69% of the reservation land. Beginning in 1953, the petitioners entered into leases with the Tribe. The Commissioner of Indian Affairs, on behalf of the Secretary, approved these leases, as required by the Act of May 11, 1938, ch.198, 52 Stat. 347, 25 U.S.C. §§ 396a-396g (1938 Act). In exchange for a cash bonus, royalties, and rents, the typical lease grants the lessee "the exclusive right and privilege to drill for, mine, extract, remove, and dispose of all the oil and natural gas deposits in or under" the leased land for as long as the minerals are produced in paying quantities. App. 22. Petitioners may use oil and gas in developing the lease without incurring the royalty.
at 24. In addition, the Tribe reserves the rights to use gas without charge for any of its buildings on the leased land, and to take its royalties in kind.
at 27-28. Petitioners' activities on the leased land have been subject to taxes imposed by the State of New Mexico on oil and gas severance and on oil and gas production equipment.
Act of Mar. 3, 1927, ch. 299, § 3, 44 Stat. 1347, 25 U.S.C. § 398c (permitting state taxation of mineral production on Indian reservations) (1927 Act).
Pursuant to its Revised Constitution, the Tribal Council adopted an ordinance imposing a severance tax on oil and gas
production on tribal land.
App. 38. The ordinance was approved by the Secretary, through the Acting Director of the Bureau of Indian Affairs, on December 23, 1976. The tax applies to "any oil and natural gas severed, saved and removed from Tribal lands. . . ."
The tax is assessed at the wellhead at $0.05 per million Btu's of gas produced and $0.29 per barrel of crude oil or condensate produced on the reservation, and it is due at the time of severance.
at 38-39. Oil and gas consumed by the lessees to develop their leases or received by the Tribe as in-kind royalty payments are exempted from the tax.
Brief for Respondent Jicarilla Apache Tribe 59, n. 42.
The United States Court of Appeals for the Tenth Circuit, sitting en banc, reversed. 617 F.2d 537 (1980). [
] The Court of Appeals reasoned that the taxing power is an inherent attribute of tribal sovereignty that has not been divested by any treaty or Act of Congress, including the 1927 Act, 25 U.S.C. § 398c. The court also found no Commerce Clause violation. We granted certiorari, 449 U.S. 820 (1980), and we now affirm the decision of the Court of Appeals.
Petitioners argue, and the dissent agrees, that an Indian tribe's authority to tax non-Indians who do business on the
(1980) (
), we addressed the Indian tribes' authority to impose taxes on non-Indians doing business on the reservation. We held that
. The power to tax is an essential attribute of Indian sovereignty, because it is a necessary instrument of self-government and territorial management. This power enables a tribal government to raise revenues for its essential services. The power does not derive solely from the Indian tribe's power to exclude non-Indians from tribal lands. Instead, it derives from the tribe's general authority, as sovereign, to control economic activity within its jurisdiction, and to defray the cost of providing governmental services by requiring contributions from persons or enterprises engaged in economic activities within that jurisdiction.
The petitioners avail themselves of the "substantial privilege of carrying on business" on the reservation.
-445 (1940). They benefit from the provision of police protection and other governmental services, as well as from "
of a civilized society'" that are assured by the existence of tribal government.
(1979)). Numerous other governmental entities levy a general revenue tax similar to that imposed by the Jicarilla Tribe when they provide comparable services. Under these circumstances, there is nothing exceptional in requiring petitioners to contribute through taxes to the general cost of tribal government. [
Cf. Commonwealth Edison Co. v. Montana,
-629 (1981);
453 U. S. 647
Colville, supra,
the tribe's interest in levying taxes on nonmembers to raise
447 U. S. 156
-157. This surely is the case here. The mere fact that the government imposing the tax also enjoys rents and royalties as the lessor of the mineral lands does not undermine the government's authority to impose the tax.
455 U. S. 145
-148. The royalty payments from the mineral leases are paid to the Tribe in its role as partner in petitioners' commercial venture. The severance tax, in contrast, is petitioners' contribution "to the general cost of providing governmental services."
Commonwealth Edison Co. v. Montana, supra,
. State governments commonly receive both royalty payments and severance taxes from lessees of mineral lands within their borders.
Viewing the taxing power of Indian tribes as an essential instrument of self-government and territorial management has been a shared assumption of all three branches of the Federal Government.
Cf. Colville, supra,
the Court relied in part on a 1934 opinion of the Solicitor for the Department of the Interior. In this opinion, the Solicitor recognized that, in the absence of congressional action to the contrary, the tribes' sovereign power to tax
Powers of Indian Tribes,
55 I.D. 14, 46 (1934)).
further noted that official executive pronouncements have repeatedly recognized that
-153 (citing 23 Op.Atty.Gen. 214 (1900); 17 Op.Atty.Gen. 134 (1881); 7 Op.Atty.Gen. 174 (1855)). [
Similarly, Congress has acknowledged that the tribal power to tax is one of the tools necessary to self-government and territorial control. As early as 1879, the Senate Judiciary
"We have considered [Indian tribes] as invested with the right of self-government and jurisdiction over the persons and property within the limits of the territory they occupy, except so far as that jurisdiction has been restrained and abridged by treaty or act of Congress. Subject to the supervisory control of the Federal Government, they may enact the requisite legislation to maintain peace and good order, improve their condition, establish school systems, and aid their people in their efforts to acquire the arts of civilized life; and
they undoubtedly possess the inherent right to resort to taxation to raise the necessary revenue for the accomplishment of these vitally important objects
-- a right not in any sense derived from the Government of the United States."
Thus, the views of the three federal branches of government, as well as general principles of taxation, confirm that Indian tribes enjoy authority to finance their governmental services through taxation of non-Indians who benefit from those services. Indeed, the conception of Indian sovereignty that this Court has consistently reaffirmed permits no other conclusion. As we observed in
(1975), "Indian tribes within
ndian country' are a good deal more than
private, voluntary organizations.'" They "are unique aggregations possessing attributes of sovereignty over both their members and their territory."
Iron Crow v. Oglala Sioux Tribe of Pine Ridge Reservation,
231 F.2d 89, 92, 99 (CA8 1956);
Crabtree v. Madden,
54 F. 426, 428-429 (CA8 1893); Cohen, "The Spanish Origin of Indian Rights in the Law of the United States," in The Legal Conscience 230, 234 (L. Cohen ed. 1960).
Nor are we persuaded by the dissent that three early decisions upholding tribal power to tax nonmembers support this limitation.
455 U. S. 175
-183, discussing
Buster v. Wright,
135 F. 947 (CA8 1905),
203 U.S. 599 (1906);
Maxey v. Wright,
3 Ind.T. 243, 247-250, 54 S.W. 807, 809 (Ct.App.Ind.T.),
105 F. 1003 (CA8 1900). In discussing these cases, the dissent correctly notes that a hallmark of Indian sovereignty is the power to exclude non-Indians from Indian lands, and that this power provides a basis for tribal authority to tax. None of these cases, however, establishes that the authority to tax derives
from the power to exclude. Instead, these cases demonstrate that a tribe has the power to tax nonmembers only to the extent the nonmember enjoys the
for example, suggests that the taxing power is a legitimate instrument for raising revenue, and that a tribe may exercise this power over non-Indians who receive privileges from the tribe, such as the right to trade on Indian land. In
the Court approved a tax on cattle grazing and relied in part on a Report to the Senate by the Committee on the Judiciary, which found no legal defect in previous tribal tax legislation having "a twofold object -- to prevent the intrusion of unauthorized persons into the territory of the Chickasaw Nation, and
" 194 U.S. at
194 U. S. 389
the question of Indian sovereignty was not even raised: the decision turned on the construction of a treaty denying the Tribe any governing or jurisdictional authority over nonmembers. 3 Ind.T. at 247-248, 54 S.W. at 809. [
Finally, the decision in
actually undermines the theory that the tribes' taxing authority derives solely from the power to exclude non-Indians from tribal lands. Under this theory, a non-Indian who establishes lawful presence in Indian territory could avoid paying a tribal tax by claiming that no residual portion of the power to exclude supports the tax. This result was explicitly rejected in
Buster v. Wright.
deeds to individual lots in Indian territory had been granted to non-Indian residents, and cities and towns had been incorporated. As a result, Congress had expressly prohibited the Tribe from removing these non-Indian residents. Even though the ownership of land and the creation of local governments by non-Indians established their legitimate presence on Indian land, the court held that the Tribe retained its power to tax. The court concluded that
"[n]either the United States, nor a state, nor any other sovereignty loses the power to govern the people within its borders by the existence of towns and cities therein endowed with the usual powers of municipalities,
nor by the ownership nor occupancy of the land within its territorial jurisdiction by citizens or foreigners.
135 F. at 952 (emphasis
added). [
] This result confirms that the Tribe's authority to tax derives not from its power to exclude, but from its power to govern and to raise revenues to pay for the costs of government.
Alternatively, if we accept the argument, advanced by petitioners and the dissent, that the Tribe's authority to tax derives solely from its power to exclude non-Indians from the reservation, we conclude that the Tribe has the authority to impose the severance tax challenged here. Nonmembers who lawfully enter tribal lands remain subject to the tribe's power to exclude them. This power necessarily includes the lesser power to place conditions on entry, on continued presence, or on reservation conduct, such as a tax on business activities conducted on the reservation. When a tribe grants a non-Indian the right to be on Indian land, the tribe agrees not to exercise its
power to oust the non-Indian as long as the non-Indian complies with the initial conditions of entry. However, it does not follow that the lawful property right to be on Indian land also immunizes the non-Indian from the tribe's exercise of its lesser-included power to tax or to
place other conditions on the non-Indian's conduct or continued presence on the reservation. [
] A nonmember who enters the jurisdiction of the tribe remains subject to the risk that the tribe will later exercise its sovereign power. The fact that the tribe chooses not to exercise its power to tax when it initially grants a non-Indian entry onto the reservation does not permanently divest the tribe of its authority to impose such a tax. [
Petitioners argue that their leaseholds entitle them to enter the reservation and exempt them from further exercises of the Tribe's sovereign authority. Similarly, the dissent asserts that the Tribe has lost the power to tax petitioners' mining activities because it has leased to them the use of the mineral lands and such rights of access to the reservation as might be necessary to enjoy the leases.
455 U. S. 186
-190. [
] However, this conclusion is not compelled by linking the taxing power to the power to exclude. Instead, it is based on additional assumptions and confusions about the consequences of the commercial arrangement between petitioners and the Tribe.
Most important, petitioners and the dissent confuse the Tribe's role as commercial partner with its role as sovereign. [
Confusing these two results denigrates Indian sovereignty. Indeed, the dissent apparently views the tribal power to exclude, as well as the derivative authority to tax, as merely the power possessed by any individual landowner or any social group to attach conditions, including a "tax" or fee, to the entry by a stranger onto private land or into the social group, and not as a sovereign power. The dissent does pay lipservice to the established views that Indian tribes retain those fundamental attributes of sovereignty, including the power to tax transactions that occur on tribal lands, which have not been divested by Congress or by necessary implication of the tribe's dependent status,
see Colville,
, and that tribes "are a good deal more than
private, voluntary organizations.'"
. However, in arguing that the Tribe somehow "lost" its power to tax petitioners by not including
a taxing provision in the original leases or otherwise notifying petitioners that the Tribe retained and might later exercise its sovereign right to tax them, the dissent attaches little significance to the sovereign nature of the tribal authority to tax, and it obviously views tribal authority as little more than a landowner's contractual right. This overly restrictive view of tribal sovereignty is further reflected in the dissent's refusal to apply established principles for determining whether other governmental bodies have waived a sovereign power through contract.
455 U. S. 189
455 U. S. 148
Moreover, the dissent implies that the power to tax depends on the consent of the taxed, as well as on the Tribe's power to exclude non-Indians. Whatever place consent may have in contractual matters and in the creation of democratic governments, it has little if any role in measuring the validity of an exercise of legitimate sovereign authority. Requiring the consent of the entrant deposits in the hands of the excludable non-Indian the source of the tribe's power, when the power instead derives from sovereignty itself. Only the Federal Government may limit a tribe's exercise of its sovereign authority.
E.g., United States v. Wheeler,
] Indian sovereignty is not conditioned on the assent of a nonmember; to the contrary, the nonmember's presence and conduct on Indian lands are conditioned by the limitations the tribe may choose to impose.
Viewed in this light, the absence of a reference to the tax in the leases themselves hardly impairs the Tribe's authority to impose the tax. Contractual arrangements remain subject to subsequent legislation by the presiding sovereign.
Sixth Ward Building & Loan Assn. of
Page 455 U. S. 148
(1934). Even where the contract at issue requires payment of a royalty for a license or franchise issued by the governmental entity, the government's power to tax remains unless it "has been specifically surrendered in terms which admit of no other reasonable interpretation."
St. Louis v. United R. Co.,
210 U. S. 266
210 U. S. 280
To state that Indian sovereignty is different than that of Federal, State or local Governments,
, n. 50, does not justify ignoring the principles announced by this Court for determining whether a sovereign has waived its taxing authority in cases involving city, state, and federal taxes imposed under similar circumstances. Each of these governments has different attributes of sovereignty, which also may derive from different sources. These differences, however, do not alter the principles for determining whether any of these governments has waived a sovereign power through contract, and we perceive no principled reason for holding that the different attributes of Indian sovereignty require different treatment in this regard. Without regard to its source, sovereign power, even when unexercised, is an enduring presence that governs all contracts subject to the sovereign's jurisdiction, and will remain intact unless surrendered in unmistakable terms.
No claim is asserted in this litigation, nor could one be, that petitioners' leases contain the clear and unmistakable surrender of taxing power required for its extinction. We could find a waiver of the Tribe's taxing power only if we inferred it from silence in the leases. To presume that a sovereign forever waives the right to exercise one of its sovereign powers unless it expressly reserves the right to exercise that power in a commercial agreement turns the concept of sovereignty on its head, and we do not adopt this analysis. [
we concluded that the "widely held understanding within the Federal Government has always been that
federal law to date has not worked a divestiture of Indian taxing power.
" 447 U.S. at
(emphasis added). Moreover, we noted that "[n]o federal statute cited to us shows any congressional departure from this view."
. Likewise, petitioners can cite to no statute that specifically divests the Tribe of its power to impose the severance tax on their mining activities. Instead, petitioners argue that Congress implicitly took away this power when it enacted the Acts and various pieces of legislation on which petitioners rely. Before reviewing this argument, we reiterate here our admonition in
436 U. S. 60
"the foregoing provisions
shall in no manner restrict the right of tribes
. . . to lease lands for mining purposes . . .
in accordance with the provisions of any constitution and charter adopted by any Indian tribe pursuant to sections 461, 462, 463, [464-475, 476-478], and 479 of this title.
] Therefore, this Act does not prohibit the Tribe from imposing a severance tax on petitioners' mining activities pursuant to its Revised Constitution, when both the Revised Constitution and the ordinance authorizing the tax are approved by the Secretary. [
Petitioners also assert that the 1927 Act, 25 U.S.C. §§ 398a-398e, divested the Tribe's taxing power. We disagree. The 1927 Act permits state taxation of mineral lessees
on Executive Order reservations, but it indicates no change in the taxing power of the affected tribes.
25 U.S.C. § 398c. Without mentioning the tribal authority to tax, the Act authorizes state taxation of royalties from mineral production on all Indian lands. Petitioners argue that the Act transferred the Indian power to tax mineral production to the States in exchange for the royalties assured the tribes. This claim not only lacks any supporting evidence in the legislative history, it also deviates from settled principles of taxation: different sovereigns can enjoy powers to tax the same transactions. Thus, the mere existence of state authority to tax does not deprive the Indian tribe of its power to tax.
Fort Mojave Tribe v. County of San Bernardino,
543 F.2d 1253 (CA9 1976),
430 U.S. 983 (1977).
Cf. Colville,
447 U. S. 158
("There is no direct conflict between the state and tribal schemes, since each government is free to impose its taxes without ousting the other"). [
Finally, petitioners contend that tribal taxation of oil and gas conflicts with national energy policies, and therefore the tribal tax is preempted by federal law. Again, petitioners cite no specific federal statute restricting Indian sovereignty. Nor do they explain why state taxation of the same type of activity escapes the asserted conflict with federal policy.
(1981). Indeed, rather than forbidding tribal severance taxes, Congress has included taxes imposed by an Indian
tribe in its definition of costs that may be recovered under federal energy pricing regulations. Natural Gas Policy Act of 1978, Pub.L. 95-621, §§ 110(a), (c)(1), 92 Stat. 3368, 15 U.S.C. §§ 3320(a), (c)(1) (1976 ed., Supp. IV). Although this inclusion may not reflect Congress' view with respect to the source of a tribe's power to impose a severance tax, [
] it surely indicates that imposing such a tax would not contravene federal energy policy, and that the tribal authority to do so is not implicitly divested by that Act.
Finding no defect in the Tribe's exercise of its taxing power, we now address petitioners' contention that the severance tax violates the "negative implications" of the Commerce Clause because it taxes an activity that is an integral Ă
S. 153Ă part of the flow of commerce, discriminates against interstate commerce, and imposes a multiple burden on interstate commerce. At the outset, we note that reviewing tribal action under the Interstate Commerce Clause is not without conceptual difficulties.
S. 130fn24|>24,
Apparently recognizing these difficulties, the Solicitor General, on behalf of the Secretary, argues that the language, [
] the structure, and the purposes of the Commerce Clause support the conclusion that the Commerce Clause does not, of its own force, limit Indian tribes in their dealings with non-Indians. Brief for Secretary of Interior 35-40. The Solicitor General reasons that the Framers did not intend
at 39. Instead, where tribal legislation is inimical to the national welfare, the Solicitor asserts that the Framers contemplated that the remedies would be the negotiation or renegotiation of treaties, the enactment of legislation governing trade and other relations, or the exertion of superior force by the United States Government.
at 38-39. Using similar reasoning, the Solicitor suggests that, if the Commerce Clause does impose restrictions on tribal activity, those restrictions must arise from the Indian Commerce Clause, and not its interstate counterpart.
at 40-43.
To date, however, this Court has relied on the Indian Commerce Clause as a shield to protect Indian tribes from state
A state tax may violate the "negative implications" of the Interstate Commerce Clause by unduly burdening or discriminating against interstate commerce.
However, we only engage in this review when Congress has not acted or purported to act.
See, e.g., Prudential Insurance Co. v. Benjamin,
328 U. S. 421
-427 (1946). Once Congress acts, courts are not free to review state taxes or other regulations under the dormant Commerce Clause. When Congress has struck the balance it deems appropriate, the courts are no longer needed to prevent States from burdening commerce, and it matters not that the courts would invalidate the state tax or regulation under the Commerce Clause in the absence of congressional action.
See Prudential Insurance Co. v. Benjamin, supra,
328 U. S. 431
] Courts are
final arbiters under the Commerce Clause only when Congress has not acted.
441 U. S. 454
Here, Congress has affirmatively acted by providing a series of federal checkpoints that must be cleared before a tribal tax can take effect. [
] Under the Indian Reorganization Act, 25 U.S.C. §§ 476, 477, a tribe must obtain approval from the Secretary before it adopts or revises its constitution to announce its intention to tax nonmembers. Further, before the ordinance imposing the severance tax challenged here could take effect, the Tribe was required again to obtain approval from the Secretary.
Revised Constitution of the Jicarilla Tribe, Art. XI, §§ 1(e), 2.
25 U.S.C. §§ 476, 477; 25 CFR § 171.29 (1980) (implementing the proviso to 25 U.S.C. § 396b, quoted in
As we noted earlier, the severance tax challenged by petitioners was enacted in accordance with this congressional scheme. Both the Tribe's Revised Constitution and the challenged tax ordinance received the requisite approval from the Secretary. This course of events fulfilled the administrative process established by Congress to monitor such exercises of tribal authority. As a result, this tribal tax comes to us in a
Finally, Congress is well aware that Indian tribes impose mineral severance taxes such as the one challenged by petitioners.
Natural Gas Policy Act of 1978, 15 U.S.C. §§ 3320(a), (c)(1) (1976 ed., Supp. IV). Congress, of course, retains plenary power to limit tribal taxing authority or to alter the current scheme under which the tribes may impose taxes. However, it is not our function nor our prerogative to strike down a tax that has traveled through the precise channels established by Congress, and has obtained the specific approval of the Secretary.
The tax challenged here would survive judicial scrutiny under the Interstate Commerce Clause, even if such scrutiny were necessary. In
, we held that a state tax on activities connected to interstate commerce is sustainable if it
Petitioners do not question that the tax on the severance of minerals from the mines [
] meets the first and the
second tests: the mining activities taxed pursuant to the ordinance occur entirely on reservation land. Furthermore, petitioners do not challenge the tax on the ground that the amount of the tax is not fairly related to the services provided by the Tribe.
Supplemental Brief for Petitioners in No. 815, pp. 11, 17-20. [
Instead, petitioners focus their attack on the third factor, and argue that the tax discriminates against interstate commerce. In essence, petitioners argue that the language "sold or transported off the reservation" exempts from taxation minerals sold on the reservation, kept on the reservation for use by individual members of the Tribe, and minerals taken by the Tribe on the reservation as in-kind royalty. Although petitioners admit that no sales have occurred on the reservation to date, they argue that the Tribe might induce private industry to locate on the reservation to take advantage of this allegedly discriminatory taxing policy. We do not accept petitioners' arguments; instead, we agree with the Tribe, the Solicitor General, and the Court of Appeals that the tax is imposed on minerals sold on the reservation or transported off the reservation before sale.
617 F.2d at 546.
] Under this interpretation, the tax does not
treat minerals transported away from the reservation differently than it treats minerals that might be sold on the reservation. Nor does the Tribe's tax ordinance exempt minerals ultimately received by individual members of the Tribe. The ordinance does exempt minerals received by the Tribe as in-kind payments on the leases and used for tribal purposes, [
] but this exemption merely avoids the administrative makework that would ensue if the Tribe, as local government, taxed the amount of minerals that the Tribe, as commercial partner, received in royalty payments. Therefore, this exemption cannot be deemed a discriminatory preference for local commerce. [
, Chief Justice Marshall observed that Indian tribes had "always been considered as distinct, independent political communities, retaining their original natural rights." Although the tribes are subject to the authority of the Federal Government, the "weaker power does not surrender its independence -- its right to self-government, by associating with a stronger, and taking its protection."
31 U. S. 661
. Adhering to this understanding, we conclude that the Tribe did not surrender its authority to tax the mining activities of petitioners, whether this authority is deemed to arise from the Tribe's inherent power of self-government or from its inherent power to exclude nonmembers. Therefore, the Tribe may enforce its severance tax unless and until Congress divests this power, an action that Congress has not taken to date. Finally, the severance tax imposed by the Tribe cannot be invalidated on the ground that it violates the "negative implications" of the Commerce Clause.
* Together with No. 80-15,
Amoco Production Co. et al. v. Jicarilla Apache Tribe, et al.,
I C. Kappler, Indian Affairs, Laws and Treaties 875 (1904) (Order of President Cleveland). Two earlier Orders setting aside land for the Tribe had been canceled.
at 874-875 (Orders of Presidents Hayes and Grant). The boundaries of the reservation were redefined or clarified by Executive Orders issued by President Theodore Roosevelt on November 11, 1907, and January 28, 1908, and by President Taft on February 17, 1912.
3 C. Kappler, Indian Affairs, Laws and Treaties 681, 682, 684, 685 (1913).
The fact that the Jicarilla Apache Reservation was established by Executive Order, rather than by treaty or statute, does not affect our analysis; the Tribe's sovereign power is not affected by the manner in which its reservation was created.
E.g., Washington v. Confederated Tribes of Colville Reservation,
1 Kappler,
Two judges dissented. Both argued that tribal sovereignty does not encompass the power to tax non-Indian lessees, 617 F.2d at 551-556 (Seth, C.J., dissenting);
at 55565 (Barrett, J., dissenting) (also arguing the tax violates the Commerce Clause).
Through various Acts governing Indian tribes, Congress has expressed the purpose of "fostering tribal self-government."
447 U. S. 155
. We agree with Judge McKay's observation that
Moreover, in its revision of the classic treatise on Indian Law, the Department of the Interior advances the view that the Indian tribes' power to tax is not limited by the power to exclude.
U.S. Solicitor for Dept. of Interior, Federal Indian Law 438 (1958) ("The power to tax does not depend upon the power to remove, and has been upheld where there was no power in the tribe to remove the taxpayer from the tribal jurisdiction") (footnote omitted).
F. Cohen, Handbook of Federal Indian Law 142 (1942) ("One of the powers essential to the maintenance of any government is the power to levy taxes. That this power is an inherent attribute of tribal sovereignty which continues unless withdrawn or limited by treaty or by act of Congress is a proposition which has never been successfully disputed") (footnote omitted).
The governing treaty in
Maxey v. Wright
restricted the tribal right of self-government and jurisdiction to members of the Creek or Seminole Tribes. The court relied, at least in part, on opinions of the Attorney General interpreting this treaty. For example, one such opinion stated that, whatever the meaning of the clause limiting to tribal members the Tribes' unrestricted rights of self-government and jurisdiction, it did
""not limit the right of these tribes to pass upon the question, who . . . shall share their occupancy and upon what terms. That is a question which all private persons are allowed to decide for themselves; and even wild animals, not men, have a certain respect paid to the instinct which in his respect they share with man. The serious words
jurisdiction' and `self-government' are scarcely appropriate to the right of a hotel keeper to prescribe rules and charges for persons who become his fellow occupants.""
Both the classic treatise on Indian law and its subsequent revision by the Department of the Interior,
agree with this reading of
n. 6, at 438; Cohen,
6, at 142 (both citing
for the proposition that the power to tax is an inherent sovereign power not dependent on the power to exclude).
See also Barta v. Oglala Sioux Tribe of Pine Ridge Reservation,
259 F.2d 553 (CA8 1958) (lessees of tribal lands subject to Indian tax on use of land).
But see Buster v. Wright,
135 F. at 958:
"'Over tribal lands,
the tribe has the rights of a landowner as well as the rights of a local government, dominion as well as sovereignty.
But over all the lands of the reservation, whether owned by the tribe, by members thereof, or by outsiders, the tribe has the sovereign power of determining the conditions upon which persons shall be permitted to enter its domain, to reside therein, and to do business, provided only such determination is consistent with applicable Federal laws and does not infringe any vested rights of persons now occupying reservation lands under lawful authority.'"
6, at 439 (quoting Solicitor's Opinion of Oct. 25, 1934) (emphasis added).
6, at 143.
P. Maxfield, M. Dieterich, & F. Trelease, Natural Resources Law on American Indian Lands 4 (1977). Federal limitations on tribal sovereignty can also occur when the exercise of tribal sovereignty would be inconsistent with overriding national interests.
447 U. S. 15
. This concern is not presented here.
Petitioners and the dissent also argue that we should infer a waiver of the taxing power from silence in the Tribe's original Constitution. Although it is true that the Constitution in force when petitioners signed their leases did not include a provision specifically authorizing a severance tax, neither the Tribe's Constitution nor the Federal Constitution is the font of any sovereign power of the Indian tribes.
E.g., Iron Crow v. Oglala Sioux Tribe of Pine Ridge Reservation,
231 F.2d 89, 94 (CA8 1956);
135 F. at 950. Because the Tribe retains all inherent attributes of sovereignty that have not been divested by the Federal Government, the proper inference from silence on this point is that the sovereign power to tax remains intact. The Tribe's Constitution was amended to authorize the tax before the tax was imposed, and this is the critical event necessary to
See Barta v. Oglala Sioux Tribe of Pine Ridge Reservation,
259 F.2d at 554, 556;
Iron Crow v. Oglala Sioux Tribe of Pine Ridge Reservation, supra,
The Tribe argues that the 1927 Act granting the States the power to tax mineral production on Indian land is inapplicable because the leases at issue here were signed pursuant to the 1938 Act. The 1938 Act, which makes uniform the laws applicable to leasing mineral rights on tribal lands, does not contain a grant of power to the States comparable to that found in the 1927 Act. As a result, the Tribe asserts that the State of New Mexico has no power to tax the production under petitioners' leases with the Tribe. Because the State of New Mexico is not a party to this suit, the Court of Appeals did not reach this issue.
617 F.2d at 547 548, n. 5. For this reason, and because we conclude that the 1927 Act did not affect the Tribe's authority to tax, we likewise do not reach this issue.
The Commerce Clause empowers Congress "[t]o regulate Commerce with foreign Nations, and among the several States, and
the Indian Tribes." U.S.Const., Art. I, § 8, cl. 3 (emphasis added).
this Court refused to invalidate a South Carolina tax on out-of-state insurance companies despite appellant's contention that the tax impermissibly burdened interstate commerce. The Court refused to entertain appellant's argument because Congress, in passing the McCarran-Ferguson Act, had provided that
Petitioners initially contend that the ordinance taxes the transportation of the minerals from the reservation, not their severance from the mines. As a result, they argue that the ordinance impermissibly burdens interstate commerce by taxing the movement in commerce itself, which is not a local event. The tax, by its terms, applies to resources that are "produced on the Jicarilla Apache Tribe Reservation and sold or transported off the Reservation." App. 39. The Tribe explains that this language was used because no sale occurs prior to the transportation off the reservation. The Tribe's tax is due at the time of severance.
at 38. Therefore, we agree with the Court of Appeals that the taxable event defined by the ordinance is the removal of minerals from the soil, not their transportation from the reservation.
The Court of Appeals noted that, because the lessees chose not to build a factual foundation to challenge the tax on this ground, there was no basis on which to find that the tax was not fairly related to the services provided by the Tribe.
at 545, n. 4. Indeed, when the Tribe attempted to introduce at trial evidence of the services it had provided to establish this relationship, the District Court rejected this evidence upon petitioners' objection that such evidence was irrelevant to their challenge. Brief for Respondent Jicarilla Apache Tribe 7-8; 6 Record 278-290, 294, 30308.
Petitioners contend that, because New Mexico may tax the same mining activity at full value, the Indian tax imposes a multiple tax burden on interstate commerce in violation of the Commerce Clause. The multiple taxation issue arises where two or more taxing jurisdictions point to some contact with an enterprise to support a tax on the entire value of its multistate activities, which is more than the contact would justify.
-385 (1952). This Court has required an apportionment of the tax based on the portion of the activity properly viewed as occurring within each relevant State.
, and n. 16 (1978).
This rule has no bearing here, however, for there can be no claim that the Tribe seeks to tax any more of petitioners' mining activity than the portion occurring within tribal jurisdiction. Indeed, petitioners do not even argue that the Tribe is seeking to seize more tax revenues than would be fairly related to the services provided by the Tribe.
455 U. S. 157
, and n. 23. In the absence of such an assertion, and when the activity taxed by the Tribe occurs entirely on tribal lands, the multiple taxation issue would arise only if a State attempted to levy a tax on the same activity, which is more than the state's contact with the activity would justify. In such a circumstance, any challenge asserting that tribal and state taxes create a multiple burden on interstate commerce should be directed at the state tax, which, in the absence of congressional ratification, might be invalidated under the Commerce Clause. These cases, of course, do not involve a challenge to state taxation, and we intimate no opinion on the possibility of such a challenge.
The Indian tribes that occupied North America before Europeans settled the continent were unquestionably sovereigns. They ruled themselves and they exercised dominion over the lands that nourished them. Many of those tribes, and some attributes of their sovereignty, survive today. This Court, since its earliest days, has had the task of identifying
The 2,100 members of the Jicarilla Apache Tribe live on a reservation in northern New Mexico. [
] The area encompassed by the reservation became a part of the United States in 1848 when the Mexican War ended in the Treaty of Guadalupe Hidalgo.
9 Stat. 922. Between 1848 and 1871, the United States did not enter into any treaty with the Jicarillas or enact any special legislation relating to them; in 1871, Congress outlawed any future treaties with Indian tribes. [
] In 1887, President Cleveland issued an Executive Order setting aside a tract of public lands in the Territory of New Mexico "as a reservation for the use and occupation of the Jicarilla Apache Indians." Except for a provision protecting bona fide settlers from deprivation of previously acquired rights, the Executive Order contained no special rules applicable to the reservation. [
] The mineral leases at issue in this case
The record does not indicate whether any leasing activity occurred on the Jicarilla Reservation between 1887 and 1953. During that period, however, the authority of Indian tribes to enter into mineral leases was clarified. In 1891, Congress passed a statute permitting the mineral leasing of Indian lands. Act of Feb. 28, 1891, § 3, 26 Stat. 795, 25 U.S.C. § 397. Because the statute applied only to lands "occupied by Indians who have bought and paid for the same," the statute was interpreted to be inapplicable to reservations created by Executive Order.
See British-American Oil Producing Co. v. Board of Equalization,
299 U. S. 161
. In 1922, the Secretary of the Interior took the position that Indian reservations created by Executive Order were public lands, and that Indians residing on those reservations had no right to share in royalties derived from oil and gas leases. 49 I.D. 139. [
In 1927, Congress enacted a statute expressly providing that unallotted lands on any Indian reservation created by Executive Order could be leased for oil and gas mining purposes with the approval of the Secretary of the Interior. [
] The statute directed that all rentals, royalties, or bonuses for such leases should be paid to the Treasurer of the United States for the benefit of the tribe for which the reservation was created. [
] The statute further provided that state taxes
could be levied upon the output of such oil and gas leases, [
] but made no mention of the possibility that the Indian tribes, in addition to receiving royalties, could impose taxes on the output. [
In 1934, Congress enacted the Indian Reorganization Act, 48 Stat. 984, 25 U.S.C. § 461
which authorized any Indian tribe residing on a reservation to adopt a constitution and bylaws, subject to the approval of the Secretary of the Interior. The Act provided that, "[i]n addition to all powers vested in any Indian tribe or tribal council by existing law," the constitution should vest certain specific powers, such as the power to employ legal counsel, in the tribe. [
also authorized the Secretary of the Interior to issue a charter of incorporation to an Indian tribe, and provided that the charter could convey to the tribe the power to purchase, manage, and dispose of its property. [
] The 1934 Act was silent concerning the right of an Indian tribe to levy taxes. [
] The first Jicarilla Apache Constitution was approved by the Secretary of the Interior in 1937. [
In 1953, the Tribe executed an oil and gas lease with the Phillips Petroleum Co. App. 220. The lease, prepared on a form provided by the Bureau of Indian Affairs of the Department of the Interior, presumably is typical of later leases executed between other companies and the Tribe. [
] The lease provides that, in return for certain rents, royalties, and a cash bonus of $71,345.99, all to be paid to the treasurer of the Tribe, the Tribe, as lessor, granted to the lessee "the exclusive right and privilege to drill for, mine, extract, remove, and dispose of all the oil and natural gas deposits in or under" the described tracts of land, together with the right to construct and maintain buildings, plants, tanks, and other necessary structures on the surface.
at 22-23. The lease is for a term of 10 years following approval by the Secretary of the Interior "and as much longer thereafter as oil and/or gas is produced in paying quantities from said land."
The lessee is obligated to use reasonable diligence in the development of the property, and to pay an annual rental of $1.25 per acre and a royalty of 12 1/2% "of the value or amount" of all oil and gas "produced and saved" from the leased land.
at 24, 26. Oil and gas used by the lessee for development and operation of the lease is royalty-free.
at 24. The Tribe reserved the rights to use, free of charge, sufficient gas for any school or other building owned by the Tribe on the leased premises, and to take its royalty in kind.
"now or hereafter in force relative to such leases:
That no regulation hereafter approved shall effect
at 27. The lease was approved by the Commissioner of Indian Affairs on behalf of the Secretary of the Interior.
at 32. Both of the 1953 leases described in the record are still producing.
In 1968, the Tribe adopted a Revised Constitution giving its Tribal Council authority, subject to approval by the Secretary of the Interior, "to impose taxes and fees on non-members of the tribe doing business on the reservation." [
] Eight years later, the Tribal Council enacted an Oil and Gas Severance Tax Ordinance, which was approved by the Secretary of the Interior. The tribal ordinance provides that a severance tax "is imposed on any oil and natural gas severed, saved and removed from Tribal lands. . . ."
at 38. The rate of the tax is $0.05 per million Btu's of gas produced on the reservation and sold or transported off the reservation, and $0.29 per barrel of crude or condensate produced on the reservation and sold or transported off the reservation.
at 39. Royalty gas or oil taken by the Tribe, as well as gas or oil used by the Tribe, is exempt from the tax.
Thus, the entire burden of the tax apparently will fall on nonmembers of the Tribe. The tax, if sustained, will produce over $2 million in revenues annually. [
The powers possessed by Indian tribes stem from three sources: federal statutes, treaties, and the tribe's inherent sovereignty. Neither the Tribe nor the Federal Government seeks to justify the Jicarilla Tribe's severance tax on the basis of any federal statute, [
] and the Jicarilla Apaches, who reside on an Executive Order reservation, executed no treaty with the United States from which they derive sovereign powers. Therefore, if the severance tax is valid, it must be as an exercise of the Tribe's inherent sovereignty.
Tribal sovereignty is neither derived from nor protected by the Constitution. [
] Indian tribes have, however, retained many of the powers of self-government that they possessed at the time of their incorporation into the United States. As stated by Justice M'Lean in
Similarly, the Court in
-382, stated: "
Two distinct principles emerge from these early statements of tribal sovereignty: that Indian tribes possess broad powers of self-governance over tribal members, but that tribes do not possess the same attributes of sovereignty that the Federal Government and the several States enjoy. [
] In determining the extent of the sovereign powers that the tribes retained in submitting to the authority of the United States,
The Court has been careful to protect the tribes from interference with tribal control over their own members. The Court has recognized that tribes have the power to prosecute members for violations of tribal criminal law, and that this power is an inherent attribute of tribal sovereignty.
. The tribes also retain the power to create substantive law governing internal tribal affairs. Tribes may define rules of membership, and thus determine who is entitled to the benefits of tribal citizenship,
; establish rules of inheritance, which supersede applicable state law,
; and determine rights to custody of a child of divorced parents of the tribe, and thus preempt adoption proceedings brought in state court.
. This substantive tribal law may be enforced in tribal courts.
Fisher v. District Court, supra.
In many respects, the Indian tribes' sovereignty over their own members is significantly greater than the States' powers over their own citizens. Tribes may enforce discriminatory rules that would be intolerable in a non-Indian community. The equal protection components of the Fifth and Fourteenth Amendments, which limit federal or state authority, do not similarly limit tribal power.
] The criminal jurisdiction of the tribes over their own members is similarly unconstrained
by constitutional limitations applicable to the States and the Federal Government. [
] Thus the use of the word "sovereign" to characterize tribal powers of self-government is surely appropriate.
In sharp contrast to the tribes' broad powers over their own members, tribal powers over nonmembers have always been narrowly confined. [
] The Court has emphasized that
450 U. S. 564
, the Court held that tribes have no criminal jurisdiction over crimes committed by nonmembers within the reservations. [
Montana v. United States, supra,
the Court held that the Crow Tribe could not prohibit hunting and fishing by nonmembers on reservation
land no longer owned by the Tribe, and indicated that the principle underlying
-- that tribes possess limited power over nonmembers -- was applicable in a civil, as well as a criminal, context. As stated by the Court,
"[t]hough
only determined inherent tribal authority in criminal matters, the principles on which it relied support the general proposition that the inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe."
450 U. S. 565
The tribes' authority to enact legislation affecting nonmembers is therefore of a different character than their broad power to control internal tribal affairs. This difference is
consistent with the fundamental principle that, "[i]n this Nation, each sovereign governs only with the consent of the governed."
. Since nonmembers are excluded from participation in tribal government, the powers that may be exercised over them are appropriately limited. Certainly, tribal authority over nonmembers -- including the power to tax -- is not unprecedented. An examination of cases that have upheld this power, however, demonstrates that the power to impose such a tax derives solely from the tribes' power to exclude nonmembers entirely from territory that has been reserved for the tribe. This "power to exclude" logically has been held to include the lesser power to attach conditions on a right of entry granted by the tribe to a nonmember to engage in particular activities within the reservation.
A study of the source of the tribes' power to tax nonmembers must focus on the extent of the tribal power to tax that existed in 1934, when the Indian Reorganization Act was enacted to prevent further erosion of Indian sovereign powers. [
Shortly after the Act was passed, the Solicitor of the Department of the Interior issued a formal opinion setting forth his understanding of the powers that might be secured by an Indian tribe and incorporated in its constitution by virtue of the reference in the Reorganization Act to powers vested in an Indian tribe "by existing law." [
] Solicitor Margold concluded
55 I.D. 14, 46 (1934). Solicitor Margold cited three decisions in support of this opinion. These three cases,
203 U.S. 599;
3 Ind.T. 243, 54 S.W. 807 (Ct.App.Ind.T.),
105 F. 1003 (CA8 1900), were decided shortly after the turn of the century, and are the three leading cases considering the power of an Indian tribe to assess taxes against nonmembers. [
] The three cases are similar in result and in their reasoning. In each, the court upheld the tax; in each, the court relied on the Tribe's power to exclude non-Indians from its reservation, and concluded that the Tribe could condition entry or continued presence within the reservation on the payment of a license fee or tax; and in each, the court assumed that the ultimate remedy for nonpayment of the tax would be exclusion from the reservation.
the Court of Appeals of Indian Territory affirmed an order by a federal territorial court dismissing a complaint filed by non-Indian lawyers practicing in the Creek Nation. The complaint sought to enjoin the Indian agent for the Five Civilized Tribes from collecting an annual occupation tax of $25 assessed on each non-Indian lawyer residing and practicing
3 Ind.T. at 247, 54 S.W. at 809. The court noted that the United States had agreed that all persons who were not expressly excepted and were present in the Creek Nation "without the consent of that Nation [were] deemed to be intruders," and that the Government had "pledge[d] itself to remove them."
at 248, 54 S.W. at 809. Because attorneys were not within any excepted class, [
] the court concluded that the Tribe had the authority to require them either to pay the license fee or to be removed as "intruders." [
at 250, 54 S.W. at 809-810. [
, decided by this Court in 1904, also arose from a challenge to an enactment of one of the Five Civilized Tribes that required non-Indians to pay annual permit fees. The complainants owned cattle and horses that were grazing on land in the Chickasaw Nation pursuant to contracts with individual members of the Tribe. Complainants filed suit in the District of Columbia seeking an injunction preventing federal officials from removing their cattle and horses from the Indian Territory for failure to pay the permit fees assessed by the Tribe. An order dismissing the complaint was affirmed by the Court of Appeals for the District of Columbia, and by this Court.
This Court's opinion first noted that treaties between the United States and the Chickasaw Nation had granted the Tribe the right "to control the presence within the territory assigned to it of persons who might otherwise be regarded as intruders," [
] and that the United States had assumed the obligation of protecting the Indians from aggression by persons not subject to their jurisdiction.
. The Court then reviewed similar legislation that had been adopted by the Chickasaw Nation in 1876, [
] and noted that, in 1879, the Senate Committee on the Judiciary had specifically referred to the 1876 legislation and expressed an opinion that it was valid.
The Court also reviewed two opinions of the Attorney General that had concluded that the power of the Chickasaw to impose permit fees had not been withdrawn by Congress. [
Although Congress subsequently had created an express exception in favor of owners of town lots, and thus protected them from eviction as intruders, the Court noted that no comparable protection had been given to owners of cattle and horses.
194 U. S. 392
-393. On the basis of these authorities, the Court concluded that the Chickasaw legislation imposing grazing fees was valid.
135 F. 947 (CA8 1905), nonmembers of the Creek Nation brought suit against federal inspectors to enjoin them from stopping the plaintiffs from doing business within the reservation; the nonmembers feared such action because they had refused to pay a permit tax assessed on traders by the Tribe. The Court of Appeals relied on
in upholding the tax. The opinion for the court by Judge Walter H. Sanborn emphasized that the tax was in the nature of a condition precedent to transacting business within the reservation, and that the plaintiffs had ample notice of the tax:
135 F. at 949-950. The court noted that the traders, who had purchased town lots of the Creek Nation pursuant to a 1901 agreement between the Creeks and the United States, could not rely on that agreement as an implied divestiture of a preexisting power to tax. [
] The court held that, even though noncitizens
of the Tribe had acquired lawful ownership of lots pursuant to the 1901 agreement, and could not be evicted from those lots, they had no right to conduct business within the reservation without paying the permit taxes. [
Prior to the enactment of the Indian Reorganization Act in 1934, these three cases were the only judicial decisions considering the power of an Indian tribe to impose a tax on nonmembers. [
] These cases demonstrate that the power of an
Indian tribe to impose a tax solely on nonmembers doing business on the reservation derives from the tribe's power to exclude those persons entirely from tribal lands or, in the alternative, to impose lesser restrictions and conditions on a right of entry granted to conduct business on the reservation. [
] This interpretation is supported by the fact that the
remedy for the nonpayment of the tax in all three cases was exclusion from the reservation. [
As I have noted, a limitation on the power of Indian tribes to tax nonmembers is not simply an archaic concept derived from three old cases that has no basis in logic or equity. Tribal powers over nonmembers are appropriately limited, because nonmembers are foreclosed from participation in tribal government. If the power to tax is limited to situations in which the tribe has the power to exclude, then the nonmember is subjected to the tribe's jurisdiction only if he accepts the conditions of entry imposed by the tribe. [
] The limited source of the power to tax nonmembers -- the power to exclude intruders -- is thus consistent with this Court's recognition
of the limited character of the power of Indian tribes over nonmembers in general. [
] The proper source of the taxing authority asserted by the Jicarilla Apache Tribe in these cases, therefore, is not the Tribe's inherent power of self-government, but rather its power over the territory that has been set apart for its use and occupation. [
This conclusion is consistent with our recent decision in
Washington v. Confederated Tribes of Colville Reservation,
. In that case we held that a tribal tax on cigarettes sold on the reservations of the Colville, Makah, and Lummi Tribes to nonmembers of the Tribes was a permissible
exercise of the Tribes' retained sovereign power to tax. [
] We recognized that the power to tax non-Indians entering the reservation had not been divested by virtue of the Tribes' dependent status, and that no overriding federal interest would be frustrated by the tribal taxation. The Court quoted with approval, as an indication of the Executive Branch's understanding of the taxing power, Solicitor Margold's 1934 opinion. The Court noted further that "[f]ederal courts also have acknowledged tribal power to tax non-Indians entering the reservation to engage in economic activity," and cited
] The tax in
which was applied to nonmembers who entered the reservation and sought to purchase cigarettes, is clearly valid under the rationale that the tribes' power to tax derives from the right to exclude nonmembers from the reservation and the lesser right to attach conditions on the entry of such nonmembers seeking to do business there. [
is consistent with the principles set forth above. The power of Indian tribes to tax nonmembers stems from the tribes' power to exclude those nonmembers; any exercise of this power must be consistent with its source. [
The power to exclude petitioners would have supported the imposition of a discriminatory tribal tax on petitioners when they sought to enter the Jicarilla Apache Reservation to explore for minerals. Moreover, even if no tax had been imposed at the time of initial entry, a discriminatory severance tax could have been imposed as a condition attached to the grant of the privilege of extracting minerals from the earth. [
] But the Tribe did not impose any tax prior to petitioners' entry or as a condition attached to the privileges granted by the leases in 1953. As a result, the tax imposed in 1976 is not valid unless the Tribe retained its power either to exclude petitioners from the reservation or to prohibit them from continuing to extract oil and gas from reservation lands.
The leases executed by the Tribe and petitioners are clearly valid, and binding on both parties. The Tribe does not contend that the leases were not the product of arm's length bargaining. Moreover, the leases were executed on a form prepared by the Department of the Interior, the Department gave specific approval to the terms of the leases, and they were executed pursuant to explicit congressional authority. [
] Under the leases, petitioners clearly have the
right to remain on the reservation to do business for the duration of the contracts. [
There is no basis for a claim that exercise of the mining rights granted by the leases was subject to an additional unstated condition concerning the payment of severance taxes. [
Nor can it be said that notice of an inherent right to tax could have been gleaned from relevant statutory enactments. When Congress enacted legislation in 1927 granting the Indians the royalty income from oil and gas leases on reservations created by Executive Order, it neither authorized nor prohibited the imposition of any taxes by the tribes. Although the absence of such reference does not indicate that Congress preempted the right of the tribes to impose such a tax, [
] the lack of any mention of tribal severance taxes defeats the argument
Thus, nothing in the leases themselves or in any Act of Congress conveyed an indication that petitioners could accept the rights conferred by the leases only by accepting a condition that they pay any subsequently enacted severance tax. Nor could such a condition be presumed from prior taxing activity of the Tribe. In my opinion, it is clear that the parties negotiated the leases in question with absolutely no expectation that a severance tax could later be imposed; in the contemplation of the parties, the conditions governing petitioners' right to extract oil and gas were not subject to change during the terms of the agreements. There simply is no support for the proposition that the Tribe retained the power in the leases to impose an additional condition on petitioners' right to enter the reservation and extract oil and gas from reservation lands. Since that authority was not retained, the Tribe does not now have the power to alter unilaterally the terms of the agreement and impose an additional burden on petitioners' right to do business on the reservation. [
"Over tribal lands, the tribe has the rights of a landowner as well as the rights of a local government, dominion as well as sovereignty. But on all the lands of the reservation, whether owned by the tribe, by members thereof, or by outsiders, the tribe has the sovereign power of determining the conditions upon which persons shall be permitted to enter its domain, to reside therein, and to do business, provided only such determination is consistent with applicable Federal laws and
does not infringe any vested rights of persons now occupying reservation land under lawful authority.
Plaintiff's Exhibit E, p. 4.
"[H]ereafter no Indian nation or tribe within the territory of the United States shall be acknowledged or recognized as an independent nation, tribe, or power with whom the United States may contract by treaty:
That nothing herein contained shall be construed to invalidate or impair the obligation of any treaty heretofore lawfully made and ratified with any such Indian nation or tribe."
EXECUTIVE MANSION, FEBRUARY 11, 1887."
"be, and the same is hereby, set apart as a reservation for the use and occupation of the Jicarilla Apache Indians:
That this order shall not be so construed as to deprive any bona fide settler of any valid rights he may have acquired under the law of the United States providing for the disposition of the public domain."
The Secretary contended that the land on Executive Order reservations was subject to leasing, as "lands of the United States," under the Mineral Lands Leasing Act of February 25, 1920, 41 Stat. 437, 30 U.S.C. 181
In 1924, Attorney General Stone rendered an opinion stating that the Mineral Lands Leasing Act did not apply to Executive Order reservations. 34 Op.Atty.Gen. 181. In 1925, Stone instituted litigation in the District Court of Utah to cancel certain leases that had been authorized by the Secretary of the Interior pursuant to the Mineral Lands Leasing Act.
H.R.Rep. No. 1791, 69th Cong., 2d Sess., 5 (1927). The case was dismissed by stipulation after the enactment of the 1927 Act noted in the text.
See United States v. McMahon,
273 U.S. 782.
A later decision by this Court suggests that the Secretary's position was correct. In
, the Court held that an Indian tribe was not entitled to compensation from the United States when an Executive Order reservation was abolished. The Court said:
316 U. S. 330
See also Tee-Hit-Ton Indians v. United States,
348 U. S. 272
348 U. S. 279
25 U.S.C. 398. Unallotted land is land that had not been allotted in severalty to individual Indians pursuant to the General Allotment Act of 1887, 24 Stat. 388.
"[T]he proceeds from rentals, royalties, or bonuses of oil and gas leases upon lands within Executive order Indian reservations or withdrawals shall be deposited in the Treasury of the United States to the credit of the tribe of Indians for whose benefit the reservation or withdrawal was created or who are using and occupying the land, and shall draw interest at the rate of 4 per centum per annum and be available for appropriation by Congress for expenses in connection with the supervision of the development and operation of the oil and gas industry and for the use and benefit of such Indians:
That said Indians, or their tribal council, shall be consulted in regard to the expenditure of such money, but no per capita payment shall be made except by Act of Congress."
"[T]axes may be levied and collected by the State or local authority upon improvements, output of mines or oil and gas wells or other rights, property, or assets of any lessee upon lands within Executive order Indian reservations in the same manner as such taxes are otherwise levied and collected, and such taxes may be levied against the share obtained for the Indians as bonuses, rentals, and royalties, and the Secretary of the Interior is authorized and directed to cause such taxes to be paid out of the tribal funds in the Treasury:
That such taxes shall not become a lien or charge of any kind against the land or other property of such Indians."
In 1938, Congress passed the Act of May 11, 1938, 52 Stat. 347, 25 U.S.C. §§ 396a-396g, which was designed in part to achieve uniformity for all mineral leases of Indian lands. Like the 1927 Act, the statute provided that the tribes were entitled to the royalties from such leases. The statute made no mention of taxes.
"The Secretary of the Interior may, upon petition by at least one-third of the adult Indians, issue a charter of incorporation to such tribe:
That such charter shall not become operative until ratified at a special election by a majority vote of the adult Indians living on the reservation. Such charter may convey to the incorporated tribe the power to purchase, take by gift, or bequest, or otherwise, own, hold, manage, operate, and dispose of property of every description, real and personal, including the power to purchase restricted Indian lands and to issue in exchange therefor interests in corporate property, and such further powers as may be incidental to the conduct of corporate business, not inconsistent with law; but no authority shall be granted to sell, mortgage, or lease for a period exceeding ten years any of the land included in the limits of the reservation. Any charter so issued shall not be revoked or surrendered except by Act of Congress."
F. Cohen, Handbook of Federal Indian Law 267 (1942) (hereinafter Cohen).
The 1937 Constitution made no reference to any power to assess taxes against nonmembers.
1937 Constitution and By-Laws of the Jicarilla Apache Tribe, Defendants' Exhibit G.
This lease is attached to petitioners' complaint in No. 80-11. The lease attached to the complaint in No. 80-15 was also executed in 1953.
App. 62. The record does not disclose the date on which most of the leases with petitioners were executed, but the record does indicate that leases were executed as late as 1967.
Plaintiffs' Exhibit 1. Leases of Jicarilla tribal property cover in the aggregate over 500,000 acres of land, comprising almost 69% of the acreage within the Jicarilla Reservation. Brief for Respondent Jicarilla Apache Tribe 2.
App. to Brief for Petitioners in No. 80-15, pp. 12a-13a. An earlier Constitution adopted in 1960 contained a similar provision permitting "taxes and fees on persons doing business on the reservation."
1960 Constitution of the Jicarilla Apache Tribe, Art. VI, § 5, Defendant's Exhibit A.
District Court's Findings of Fact and Conclusions of Law, Finding No. 32, App. 130. The Tribe's answers to interrogatories indicate that, in 1976, the royalties on the leases received by the Tribe amounted to $3,995,469.69.
Plaintiff's Exhibit E, p. 7; Tr. 269.
Congress may delegate "sovereign" powers to the tribes.
. As indicated, however, neither the 1927 statute permitting Indians to receive royalties from the lease of tribal lands nor the Indian Reorganization Act of 1934 conveys authority to the Indian tribes to tax.
455 U. S. 163
The Indian tribes often have been described as "domestic dependent nations." The term was first used in
5 Pet. 1, where Chief Justice Marshall, writing for the Court, explained:
The United States retains plenary authority to divest the tribes of any attributes of sovereignty.
435 U. S. 319
Winton v. Amos,
255 U. S. 373
; 1 American Indian Policy Review Commission, Final Report 106-107 (1977) (hereinafter AIPRC Final Report). Thus, for example, Congress can waive the tribes' sovereign immunity.
See United States v. United States Fidelity & Guaranty Co.,
The Indian Civil Rights Act of 1968, 82 Stat. 77, 25 U.S.C. §§ 1301-1303, prohibits Indian tribes from denying "to any person within its jurisdiction the equal protection of its laws." § 1302(8). In
however, the Court held that sovereign immunity protected a tribe from suit under the Act, that the Act did not create a private cause of action cognizable in federal court, and that a tribal court was the appropriate forum for vindication of rights created by the Act.
, the Court held that the Fifth Amendment right to indictment by grand jury does not apply to prosecutions in tribal courts.
See also United States v. Wheeler, supra,
435 U. S. 328
Certain treaties that specifically granted the right of self-government to the tribes also specifically excluded jurisdiction over nonmembers.
Treaty with the Cherokees, Art. 5, 7 Stat. 481 (1835); Treaty with the Choctaws and Chickasaws, Art. 7, 11 Stat. 612 (1855); Treaty with the Creeks and Seminoles, Art. 15, 11 Stat. 703 (1856).
"Upon incorporation into the territory of the United States, the Indian tribes thereby come under the territorial sovereignty of the United States and their exercise of separate power is constrained so as not to conflict with the interests of this overriding sovereignty. '[T]heir rights to complete sovereignty, as independent nations, [are] necessarily diminished.' 8 Wheat.
21 U. S. 543
(1823)."
See also New York ex rel. Ray v. Martin,
326 U. S. 499
] quoted Justice Johnson's words in his concurrence in
-- the first Indian case to reach this Court -- that the Indian tribes have lost any 'right of governing every person within their limits except themselves.' 435 U.S. at
See also Oneida Indian Nation v. County of Oneida,
(tribes cannot freely alienate to non-Indians the land they occupy);
-18 (tribes cannot enter into direct commercial or foreign relations with other nations).
United States v. Wheeler, supra,
the Court held that the tribes' power to prosecute its members for tribal offenses was not "implicitly lost by virtue of their dependent status," but stated:
[6 Pet.] at
31 U. S. 560
-561."
" In addition to
all powers vested in any Indian tribe or tribal council by existing law,
the constitution adopted by said tribe shall also vest. . . ."
Felix Cohen, in his Handbook on Federal Indian Law published in 1942, also relies on these cases in his discussion of tribal taxation of nonmembers. Cohen 266-267. The Court, in
, cited both
in upholding an exercise of the tribal power to tax. 447 U.S. at
455 U. S. 185
"Replying to your fourth question: it seems from what has been already said that, besides those persons or classes mentioned by you, only those who have been permitted by the Choctaws or Chickasaws to reside within their limits, or to be employed by their citizens as teachers, mechanics, or skilled agriculturists, have a right to enter and remain on the lands of these tribes;
and the right to remain is gone when the permit has expired.
at 136 (emphasis added).
"I submit that, whatever this may mean, it does not limit the right of these tribes to pass upon the question, who (of persons
indifferent to the United States, i.e.,
neither employes, nor objectionable) shall share their
and upon what terms. That is a question which all private persons are allowed to decide for themselves. . . ."
at 256-257, 54 S.W. at 812.
194 U.S. at
After citing the opinion of Attorney General Griggs quoted at length in
Judge Sanborn wrote:
Two decades after the Reorganization Act was passed, the problem was revisited by the Eighth Circuit. In
231 F.2d 89 (1956), the court held that the Tribe had the power to assess a tax on a nonmember lessee of land within the reservation for the privilege of grazing stock on reservation land. And in
Barta v. Oglala Sioux Tribe of Pine Ridge Reservation,
259 F.2d 553 (1958), the court held that the United States could bring an action on behalf of the Tribe to collect a license tax of 3 cents per acre per annum for grazing land and 15 cents per acre per annum for farm land levied on nonmember lessees. T he court in
held that the tax did not violate the constitutional rights of the nonmember lessees, stating in part:
at 556. Language in both
suggests that the Court of Appeals, unlike the earlier courts, may not have rested the taxing power solely on the power to exclude. The Court of Appeals, of course, did not have the benefit of our decisions in
Montana v. United States.
In another chapter, entitled "The Scope of Tribal Self-Government," cited by the Secretary of the Interior and the Tribe here, Cohen describes the power of taxation as "an inherent attribute of tribal sovereignty which continues unless withdrawn or limited by treaty or by act of Congress. . . ."
at 142. After discussing
Buster v . Wright,
Cohen cites that case for the proposition that
Cohen 143. As demonstrated above, however, the license tax in
was predicated on the tribe's right to attach conditions on the right of nonmembers to conduct business on the reservation; the tribe could prevent such nonmembers from doing business regardless of whether it could physically remove them from the reservation. Moreover, in that same chapter on tribal self-government, Cohen recognizes that tribal taxes have been upheld on the basis of the tribe's power to remove nonmembers from the reservation, and that
the penalty for nonpayment of the tax was the closing of the nonmember's business, enforced by the Secretary of the Interior. 135 F. at 954. In
the remedy was the removal of the nonmember's cattle from the reservation, again enforced by the United States. 194 U.S. at
an attorney refusing to pay the license fee to the Interior Department was subject to removal from the reservation. 3 Ind.T. at 250, 54 S.W. at 810.
"No noncitizen is required to exercise a privilege or to pay the tax. He may refrain from the one, and he remains free from liability for the other."
135 F. at 949.
455 U. S. 171
-172. As I have indicated,
treaties recognizing the inherent power of tribal self-government have also deprived the tribes of jurisdiction over nonmembers. Nevertheless, those same treaties often specifically recognized the right of the tribe to exclude nonmembers from the reservation or to attach conditions on their entry.
Treaty with the Choctaw and Chickasaw, Art. 7, 11 Stat. 612 (1855); Treaty with the Creeks and Seminoles, Art. 15, 11 Stat. 699 (1856).
2 C. Kappler, Indian Affairs, Laws and Treaties 7, 9, 12, 15, 17, 20, 21, 27, 30, 42, 75, 418, 682, 699, 703, 719, 761, 774, 779, 790, 794, 800, 866, 886, 888, 929, 985, 990, 998, 1008, 1016, 1021 (1904).
The Court also cited, without discussion, the Eighth Circuit's decision in
231 F.2d 89 (1956).
In some respects, the tribal power to tax nonmembers may be greater than the taxing power of other sovereigns. States do not have any power to exclude nonresidents from their borders. Moreover, their taxing statutes, like their other laws, must comply with the Equal Protection Clause of the Fourteenth Amendment. They may not, therefore, impose discriminatory taxes as a condition attached to entry into the jurisdiction in order to engage in economic activity. But since an Indian tribe has exclusive control over the "use and occupancy" of land within its reservation, it arguably could attach special discriminatory conditions to any license to a nonmember to use or occupy a portion of that land. As stated earlier, at a minimum, the equal protection components of the Fifth and Fourteenth Amendments, which limit the sovereign powers of the Federal and State Governments, do not similarly restrict the sovereign powers of an Indian tribe.
455 U. S. 170
Congress intended the Act of March 3, 1927 to make applicable to Executive Order reservations the leasing provisions already applicable to treaty reservations pursuant to the Act of May 29, 1924, ch. 210, 43 Stat. 244. S.Rep. No. 1240, 69th Cong., 2d Sess., 3 (1927). The 1927 Act thus permitted the leasing of unallotted Indian land for terms not to exceed 10 years and as much longer as oil and gas in paying quantities were found on the land. 44 Stat. (part 2) 1347. Among the purposes of the 1927 statute were to "[p]ermit the exploration for oil and gas on Executive order Indian Reservations," to "[g]ive the Indian tribes all the oil and gas royalties," and to "[p]lace with Congress the future determination of any changes of boundaries of Executive order reservations or withdrawals." S.Rep. No. 1240,
at 3. In light of these purposes, it is clear that Congress intended leases executed pursuant to the 1927 Act to be binding.
The Tribe contends that the leases in these cases were executed pursuant to the Act of May 11, 1938, 52 Stat. 347, and not the 1927 Act. The Tribe notes that the lease in No. 80-15 states that it was executed pursuant to the 1938 Act.
App. 64. In response, petitioners note that, although the Tribe argues that the 1938 Act -- unlike the 1927 Act -- does not require that royalties be paid to the Secretary of the Interior for the benefit of the Tribe, petitioners make their royalty payments to the United States Geological Survey for the benefit of the Jicarilla Apache.
Tr. 79-80. There is no need to resolve this question, because, for our purposes, the provisions of the 1938 Act do not vary significantly from the provisions of the 1927 Act. The 1938 Act, like the 1927 Act, permits the leasing of Indian lands for a period "not to exceed ten years and as long thereafter as minerals are produced in paying quantities." 25 U.S.C. § 396a. One of the purposes of the 1938 Act was to establish uniformity in the leasing of tribal lands by applying the law governing oil and gas leasing to all other mineral leasing as well. S.Rep. No. 985, 75th Cong., 1st Sess., 1-2 (1937). Other purposes were to "bring all mineral leasing matters in harmony with the Indian Reorganization Act,"
at 3, and to enact changes designed "to give the Indians the greatest return from their property."
at 2. There is no indication in the legislative history that the purposes of the 1938 Act are in any way inconsistent with the purposes of the 1927 Act and prior legislation. Presumably, the purposes of the earlier legislation were incorporated into the uniform scheme intended by the 1938 Act.
the nonmember desiring to purchase cigarettes on the reservation knew that his right to do so was conditioned on his consent to pay the tax. Attorney General Griggs, in his 1900 opinion on "Trespassers on Indian Lands," discussed in similar terms the effect on tribal laws of a federal statute providing for the sale of reservation lots to non-Indians:
The Secretary of the Interior argues that a license or franchise issued by a governmental body does not prevent the later imposition of a tax unless the right to tax "
has been specifically surrendered in terms which admit of no other reasonable interpretation.'" Brief for Secretary of Interior 13, n. 7 (quoting
See also New Orleans City & Lake R. Co. v. New Orleans,
New York Transit Corp. v. City of New York,
303 U. S. 590
-593. The principal issue in these cases cited by the Secretary was whether the retroactive imposition of a franchise tax violated the Contract Clause of the Constitution or was so fundamentally unfair as to constitute a denial of due process in violation of the Fourteenth Amendment. Although this argument was by no means frivolous,
315 U. S. 610
, no such issue is raised here. These cases are distinguishable from the instant cases because Indian tribes do not have the same attributes of sovereignty as do States and their subdivisions.
455 U. S. 168