*1 BOARD, INC., RAMAH NAVAJO SCHOOL et al. v. MEXICO BUREAU OF REVENUE OF NEW Argued April July No. 80-2162. 198 2 Decided *2 J., opinion Court, delivered the Marshall, in which Burger, J., C. and Brennan, Blackmun, JJ., joined. Powell, O’Connor, J., opinion, Rehnquist, dissenting filed a in which White Stevens, JJ., joined, p. post, 847. P. Michael Gross argued cause for With appellants. Bryant Rogers him on the briefs were Carl and Neal A. Jackson.
Deputy Solicitor General Claiborne the cause for argued the United States as amicus curiae reversal. With urging Solicitor General Assistant Attor- Lee, him on the brief were Hadley ney General Dinkins, Elinor Edward Stillman, J. A. Shawaker, Maria Iizuka. Unna,
Jan Assistant Special Attorney General of New Mexico, the cause for him With on the argued appellee. Bingaman, and Gerald B. brief were Attorney General, Jeff Richardson, Assistant Attorney General.* urging by George
* Briefs of amici curiae reversal filed were P. Vlassis Navajo Indians; by and Katherine Ott for the Tribe of Richard W. Hughes for the Pueblo of Santa Ana. Maclay Boggs, Special
Helena Attorneys S. and Deirdre Assistant Montana, Johnson, Attorney General of Leland T. Assistant General of Washington, Spannaus, Attorney Minnesota, Warren General of Mark V. Dakota, Meierhenry, Attorney Bryan, General of South and Richard H. Attorney Nevada, brief et General filed a for State of Montana al. as urging amici curiae affirmance. by George Attorney
Briefs were Deukmejian, of amici curiae filed Gen- eral, Gobar, Deputy Attorney General, and Neal J. Califor- the State of Lazarus, nia; Jr., and Arthur for the Association of American Indian Affairs, Inc. opinion the Court. delivered Marshall
Justice question law whether federal address the case, we gross receipts imposed that a pre-empts on the tax a state company a tribal receives from construction non-Indian chil of a school for Indian the construction school board Appeals The New Mexico Court of on the reservation. dren imposed of New tax the State held that the in permissible. Because the decision below Mexico was Apache Bracker, Tribe v. Mountain with White consistent (White (1980) Mountain), we reverse. 448 U. S.
I Navajo Chap- Approximately Ramah members of the 2,000 *3 Navajo live on tribal trust and allot- Indian Tribe ter of the in central New Mexico. Ramah located west ment lands public high Navajo a small school near the children attended facility in 1968. Be- closed this reservation until State high reasonably public schools there were no other cause Navajo the Ramah children were reservation, close to the high education at- abandon their school or to forced either to boarding far from the reserva- federal Indian schools tend Navajo Chapter the Ramah exercised its au- 1970, tion. §51 (1969), Navajo thority Code, Tribal Title under remedy in order to this situ- its own school board established (the Navajo Appellant Ramah Inc. Board, ation. Board), School organized nonprofit corporation oper- was as a to be exclusively by Navajo Chapter. ated members of the Ramah organization” Navajo “tribal within the mean- The Board is a §450b(c), pro- ing 88 Stat. 2204. With funds of 25 U. S. C. (BIA) and the the federal Bureau of Indian Affairs vided Navajo operated in a school Tribe, Indian Board facility, creating public thus the first inde- abandoned school pendent school modern times.1 Affairs, July 8, 1970, Message Congress in his to the on Indian Pres On specifically to these efforts of the Board to assume ident Nixon referred education of tribal children abandoned responsibility for the In 1972, the Board successfully solicited from Congress for the funds of new design school facilities. L. Pub. 92-369, 86 Stat. 510. The Board then contracted with the BIA for of the new school and design hired architect. In the Board contracted with the BIA for the actual construc- tion of the new school to built on reservation land. Fund- ing for construction was facility a se- provided by ries of congressional appropriations specifically earmarked for this The contract purpose.2 that the specified Board was design building contractor for the project, but that the Board could subcontract the actual construction work to third parties. The contract further provided any sub- contracting would agreement have to include certain clauses governing pricing, wages, bonding, and the like, and that it must be the BIA. approved by
The Board then solicited bids from area contrac- building tors for the construction of the school, and received bids from two non-Indian firms. Each firm included the re- state gross ceipts tax as a cost construction their bids, although the tax was not itemized separately. Appellant Lembke Con- (Lembke) struction Co. was the low bidder and was awarded The contract. contract between the Board and Lembke provides Lembke is all pay “taxes law.” required by Lembke began construction of the school facilities 1974 and continued this work for years. over five time, During Lembke paid and, pursuant tax to stand- *4 ard industry was practice, by reimbursed the Board full amount Before the second paid. contract between in 1977, Lembke and the Board was a clause executed was inserted into the contract that the Board could recognizing exampl[e]” State as a “notable of Weekly- Indian self-determination. 6 (1970). 894, Comp. of Pres. Doc. 899 2 (1973) 93-245, (amending 93-120, See Pub. L. 87 Stat. 1073 L. Pub. 87 (1973) specifically appropriated Stat. 431 earmark funds there for the 93-404, of facility); construction the Ramah school Pub. L. 88 810 Stat. (1974); 94-165, (1975); 95-74, Pub. L. 89 L. Stat. 985 Pub. 91 293 Stat. (1977). 836 any validity
litigate this tax was entitled to refund. imposition protested the the Board Both Lembke exhausting gross receipts In after adminis- 1978, tax. against appel- they this refund action filed remedies, trative Dis- of Revenue the New Mexico lee Mexico Bureau New parties stipulated trial, At time of trict Court. payments tax had reimbursed Lembke for Board any refund that $232,264.38and that the Board would receive might awarded. judgment entered for the State Bureau
The trial court noting “legal tax- that the incidence” of the Revenue. After rejected firm, construction court fell the non-Indian appellants’ arguments pre-empted the tax was com- imposed imper- regulation prehensive that it federal Appeals sovereignty. The Court of missible burden on tribal affirmed. 95 of New Mexico N. M. for the State (1980). Although acknowledging eco- P. 2d 1225 that the Ap- Board, nomic of the tax fell on the the Court of burden preempted peals that the tax was not concluded unlawfully sovereignty. it did not burden tribal law and that petition rehearing light this The Board filed a Court’s intervening supra, Mountain, White decisions Central Machinery Comm’n, v. Arizona Tax 448 U. Co. State S. (1980). petition, stating Appeals The Court of denied the only comprehensive case did not involve either “a regulation” pervasive regula- scheme of federal or “federal App. the Indian trader tion similar to statutes.” to Juris. initially granting discretionary 36. review, Statement After Supreme quashed improvi- Mexico the writ as New Court (1981). granted. dently P. 96 N. M. 2d 412 We (1981). probable jurisdiction. noted U. S. 1079 II years, dif- recent this Court has often confronted the reconciling plenary problem power ficult “the over residents within their borders States with the semi-
837 living autonomous status of Indians on tribal reservations.” v. McClanahan Arizona State Tax Comm’n, U. S. 164, (1973). Although there is no definitive formula for re- solving question may whether a State exercise its author- ity over tribal members or reservation we have activities, recently identified the relevant federal, tribal, and state in- determining particular terests to be considered whether a authority exercise of state violates federal law. See White Mountain, 448 U. atS., 141-145.
A
recognized
Mountain,
White
we
that the federal and
power Congress
tribal interests arise from the broad
regulate tribal affairs under the Indian Commerce Clause,
§I,Art.
cl.
and from
In-
semi-autonomous status of
dian
S.,
tribes.
at 142. These interests tend to
“independent
erect two
but related” barriers to the exercise
authority
activity
of state
over commercial
on an Indian res-
authority may
pre-empted
ervation: state
federal law,
may
ability
or it
interfere with the tribe’s
to exercise its sov-
Ibid, (citing,
ereign
Trading
alia,
functions.
inter
Warren
(1965);
Post Co. v. Arizona Tax Comm’n, 380
S.U.
supra;
v. Arizona
Comm’n,
McClanahan
State Tax
and Wil-
(1959)).
explained
liams v.
“The two barriers are either, because standing holding alone, can be a sufficient basis for inapplicable activity law undertaken on the reserva- They tion or tribal members. are related, however, important ways. right self-govern- in two The of ultimately dependent subject ment is on to the broad Congress. power Even so, notions In- traditional self-government deeply engrained ju- dian are so in our risprudence they provided important have ‘back- against vague drop,’ ambiguous . . . which always enactments must be measured.” 448 U. *6 (quoting Comm’n, Tax v.Arizona State McClanahan 172). supra, at authority exercising regulatory in interest
The State’s ap- given activity question in must be examined and over the Pre-emption analysis weight. propriate in this area is not conceptions by of state “mechanical or absolute controlled particularized sovereignty”; requires examination a tribal and tribal interests. state, federal, relevant of the question re- law, whether federal which at 145. The S.,U. pre-empts the interests, and tribal the related federal flects authority regulatory is not controlled of its exercise State’s developed pre-emption in Id., other areas. standards notions of tribal sover- Instead, 143-144. the traditional at eignty, encouragement recognition of this sover- and the independence promoting eignty congressional tribal Acts analysis pre-emption development, inform the economic inquiry. governs at and n. 10. Rele- id., See light examined in and treaties must be vant federal statutes policies that underlie them and the notions “the broad of sovereignty developed from historical traditions that have ambigu- independence.” 144-145. Id., result, at As generously, and fed- law should be construed ities pre-emption situations where Con- is not limited to those eral pre-empt gress explicitly announced an intention has activity. at 150-151. Id., 143-144, applied principles held we these Mountain,
In White pre-empted application of the state motor that federal law logging a non-Indian and use fuel taxes to carrier license activity company’s land. found the federal on tribal We per- harvesting Indian timber to be so scheme for imposition precluded of additional burdens that it vasive by Secretary 148. The Id., taxes. the relevant state regula- (Secretary) promulgated detailed had the Interior people developing forests the Indian “‘Indian tions for self-sustaining purpose promoting communities.’” (1979)). 141.3(a)(3) § (quoting 25 CFR at 147 Id., regulations, virtually Under these the BIA was involved in every aspect production marketing tim- particular, ber. 448 Secretary S.,U. at 145-148. extensively regulated and the BIA the contractual relation- ship working between the Indians and the non-Indians on the they bidding procedure, reservation: established the set man- datory every required terms to be included contract, and approved by Secretary. that all contracts be Id., at 147. *7 question We found that the state taxes in would “threaten overriding objective guaranteeing federal of Indians that they profit [the will . ‘receive . . the benefit of whatever for- ” capable yielding. est] (quoting is of .. .’ Id., at 149 25 CFR (1979)). 141.3(a)(3) § imposition We concluded that the Secretary’s ability state taxes would also undermine the carry obligations out his to set fees and rates for the harvest- ing impede and sale timber, and it would the “Tribe’s ability comply sustained-yield management poli- with the imposed by cies federal law.” 448 U. at 149-150. Bal- against anced this intrusion into the federal scheme, the only general State asserted “a desire to raise revenue” as its justification imposing Id., taxes. at 150. In this justify context, this interest is insufficient to the State’s in- sphere heavily regulated by trusion into a so the Federal Government. Ibid.
B indistinguishable respects This case is in all relevant from regulation White Mountain. Federal financing of the construction and compre of Indian educational institutions is both pervasive. hensive and The Federal concern Government’s with the education of Indian children can be traced back to Navajo the first treaties between the United States and the Congress Tribe.3 Since time, has enacted numerous 3 of the Treaty Article VI 1868 between the United States and the Nav Tribe, 669, 15 ajo provides Stat. “[i]n order to insure the civiliza- 840 provide empowering the BIA to for Indian education
statutes Snyder g., e. 42 See, Act, on and off the reservation. both (1921), Johnson-O’MalleyAct, 48 25 U. S. C. §13; Stat. 208 §452 (1934), seq.; Navajo-Hopi Re- U. S. et 596 25 C. Stat. §631 (1950), seq.; et 25 U. C. Act, 64 Stat. S. habilitation Act, 88 and Education Assistance Indian Self-Determination (Self-Determina- §450 (1975), seq. et S. C. Stat. Act). early Although the efforts in focus the federal tion providing educa- concentrated federal this area early children, 1970’sthe tional facilities for encouraging development policy shifted federal toward institutions on the See 6 of Indian-controlled reservation. (1970) Weekly (Message Comp, 894, of Pres. Doc. 899-900 Nixon). President policy
This has codified the Indian Financ- been §1451 ing seq., C. et Act 88 Stat. U. S. notably in the Self-Determination Act. The Self- most “major goal declares that a national Determination Act quantity provide quality United States educa- opportunities permit *8 tional services and which will Indian compete in life and excel the areas of their choice, children to to measure of self-determination and achieve the essential to well-being.” and economic 88 as 2203, their social Stat. set 450a(c). § achieving goal, in In 25 U. S. this Con- forth C. recognized “parental gress expressly community process importance educational is of crucial control the to people.” 88 Stat. as set forth 25 2203, the Indian U. S. C. 450(b)(3). § Secretary empowers promulgate regu- 450k the to
Section accomplish purposes Act. Stat. lations to authority, §450k. to this S. Pursuant the Secre- 25 U. C. tary comprehensive regula- promulgated has detailed and respecting previously private for construction tions “school entering treaty, necessity tion of the Indians into of education is admitted.” operated by tribally
schools now controlled and tribes or (1981). §274.1 approved organizations.” Indian 25 CFR regulations, wide-ranging Under these the BIA has author- ity subcontracting agreements to monitor and review the organization, between which is viewed as the ' general actually contractor, and the non-Indian firm that con- (1981).4 §274.2 Specif- structs the facilities. See 25 CFR ically, preliminary inspections, the BIA must conduct on-site prepare project cooperation for cost estimates with (1981). organization. § the tribal 25 CFR 274.22 The Board approve any engineering agreements must architectural or 274.32(c) § project. executed (1981). connection with the 25 CFR regulations empower In addition, the BIA require subcontracting agreements that all contain certain ranging relating bonding pay terms, from clauses §14H-70.632 (1981), preferential scales, 41 CFR treat- (1981). §274.38 Finally, ment for Indian workers. 25 CFR fulfilling statutory obligations, to ensure that the Tribe is regulations require organization the tribal to maintain §274.41 Secretary’s inspection. records 25 CFR (1981). governing
This detailed the construc scheme tion autonomous Indian educational facilities is at least as comprehensive pre-emptive as the federal scheme found to be supervision pro- in White Mountain.5 The direction and 4Although regulations these did not become effective until several contracts, months after the BIA and the Board initial had executed the Secretary applied BIA requirements and the had similar under the author et seq. ity Act, Johnson-O’Malley § Stat. 25 U. S. C. any event, subsequent agreements BIA, the two between the the Board Lembke, accounting construction, two-thirds the total were *9 signed regulations, after the effective clearly date these which authorize BIA agreements. the to monitor construction these Rehnquist comprehensive the Justice asserts that federal regulate construction, “do[es] scheme outlined above not school which Post, activity is at 851. The to explain, the taxed.” dissent fails how ever, White Mountain. distinguishes from how this fact this case In that of In- Federal for the construction by vided the Government leave no room for the additional burden sought dian schools the the its taxation of by through gross to be State imposed the burden, to Board. This al- paid by Lembke receipts contractor, the nec- nominally on non-Indian though falling the interest in essarily clearly expressed impedes opportu- the and educational “quality quantity” promoting the funds for the con- by nities Indians available depleting Indian schools.6 struction of
case,
tax,
fuel
motor
we struck down Arizona’s use
tax and
carrier license
licenses,
any
gasoline,
highways,
in
federal interest
but
not because
imposition
the
these state taxes on a non-Indian contractor do-
because
pre-empted by
“comprehensive
reservation was
the
ing
regu-
work
the
harvesting
S.,
lation of
and sale of tribal timber.”
U.
at 151. We
similarly precluded
impeding
that New Mexico is
from
the federal in-
find
by
in
construction of autonomous Indian educational institutions
terest
Rehnquist’s
receipts
imposing
gross
tax on
Lembke.
con-
Justice
compatible
that
New
tax is
tention
Mexico
somehow
with this federal
much
cost
interest because such taxes “are as
a normal
of school construc-
post,
labor,”
855,
as the
cement
tion
cost of
at
also foreclosed
Surely,
White Mountain.
fuel
state use
and motor carrier license taxes
part
harvesting
marketing
are
of the cost of
timber.
considered
Yet
Mountain,
White
impeded
we
that
concluded
these taxes
the federal in-
“guaranteeing
they
terest
will ‘receive .
. the
Indians
.
benefit of
profit
capable
yielding,’”
whatever
[the forest] is
de-
argument
spite the dissent’s
that the taxes amounted to
than 1% of
less
as White
profits produced by
logging operation. Here,
annual
Mountain,
Rehnquist
press
to
this argument.
continues
Justice
6Appellee
impute congressional
approval
have
would
us
awareness
appropriations
of the state
tax from
bills which earmarked
facilities,
supra.
funds for
construction
these
n.
Brief
see
Appellee
Appellee
approval by
21-22.
strains to find this awareness and
arguing
prepared
the same architects who
the cost estimates
requests
Congress
that the
prepared
Board submitted to
also
bid
specifications pursuant
However,
Lembke
which
submitted its bid.
as
indicated,
specifications only required prospective
we have
the bid
bidders
law,”
required by
include
spec
“all taxes
and the submitted
did not
bids
Supra,
ify
gross receipts
separate
tax as a
line item.
at 835. There
fore,
clear,
contention,
disputes
it is
means
and the
no
Board
the Board ever intended
have these state taxes
in the
included
construc
Furthermore,
absolutely
costs of
tion
its school facilities.
there is
no
*10
The
argues
Bureau of
imposition
Revenue
of the state
pre-empted
tax is not
because the
regu-
federal statutes and
specifically
lations
express
do not
pre-empt
intention to
authority.
exercise
argument
This
clearly
precedents.
foreclosed
rejected
our
In White
flatly
Mountain we
argument.
a similar
448 U.
(citing
150-151
Trading
Warren
Post Co. v. Arizona Tax Comm’n, 380
(1965);
U. S. 685
Williams v.
(1959);
Lee,
In this case, the State does not seek to assess its tax in re- turn governmental for the provides it functions to those who must bear paying the burden of Having this tax. declined to any responsibility take for the education of these Indian chil- precluded dren, the State is imposing from an additional bur- comprehensive den on the provide federal scheme intended to this education—a scheme which has “left the State with no responsibilities.” duties or Trading Warren Post Co. v. Ari- zona supra, Tax Comm’n, at 691.7 Nor has the State as- any specific, legitimate serted justify interest to imposition of its only tax. arguably The indication Congress was even made aware of the existence of these taxes it appropriated when funds for the construction of the Ramah Navajo any school. event, as we have noted in a context, related courts should wary of inferring congressional intent to alter the force existing law from appropriations Hill, Cf. ATV v. Act. 153, 189-191 (1978). 437 U. S. course, Of these statutes regulations prevent do not the States from providing for the education of Indian children within their bound aries. Indeed, the Self-Determination specifically Act authorizes the Sec retary to enter into contracts any with willing State to construct educa tional institutions for Indian children on or near the reservation. 88 Stat. § 25 U. S. C. 458. This case would be different if the State were actively tax seeking revenues for purpose of constructing, or assisting in the effort provide, adequate educational facilities for Ramah Navajo children. provides
specific advanced State is interest reservation. This Lembke for activities services to off *11 justification legitimate a for tax a however, is not interest, organization.8 Fur- falls on the tribal burden whose ultimate may although benefits confer substantial the State thermore, see how these we fail to contractor, as a state on Lembke imposed justify on the construction a can tax benefits pursuant a contract be- tribal lands to on school facilities contracting organization and the non-Indian tween the gross receipts to tax is intended firm.9 The New Mexico engaging privilege granting compensate “the the State 9—3(F) 7-9-4(A) §§ Ann. in N. M. Stat. business.” 7— (1980). explained of its the source not New Mexico has “privilege levy power case the a tax where such to exclusively doing is be- reservation on Indian business” by the Federal stowed Government. test, “legal adopt the incidence” Revenue us to The Bureau of invites of the tax would and not the actual burden legal incidence
under which
contexts,
course,
the fact
in some
pre-emption inquiry. Of
control the
significant.
falls on a non-Indian is
See
legal incidence of the tax
Reservation, 447
Washington
Colville Indian
v.
Tribes of
Confederated
Tribes, 425 U.
134,
(1980);
v.
& Kootenai
S. 463
150-151
Moe Salish
U. S.
(1976).
S.,
sig
it
Mountain,
we found
However, in
448 U.
White
ultimately
the asserted
would
the economic burden of
taxes
nificant that
tax was on the non-
Tribe,
though
legal incidence of the
on
even
fall
regulatory
comprehensive federal
company. Given the
logging
impose additional
here,
to allow the
we decline
State
scheme at issue
educa
fostering
Indian-run
significant
interest
on
federal
burdens
indirectly through
imposed
institutions,
if
are
even those burdens
tional
on
reservation.
for work done
tax on a non-Indian contractor
Comm’n,
Tax
The
justification
State’s ultimate
imposing
this tax
nothing
amounts to
general
more than a
desire to increase
purpose,
revenues. This
as we held in White Mountain, 448
at 150, justify
insufficient the additional burdens
imposed by the tax
comprehensive
on the
federal scheme
regulating the creation and
maintenance
educational
opportunities for Indian children and
express
on the
policy
encouraging
Indian self-sufficiency in the area of
education.10
This
precludes
scheme
any state tax
as
“stands
an obstacle
accomplishment
to the
of the full
purposes
objectives
Congress.”
Hines v. Davidowitz,
(1941).
C The Solicitor General, an amicus brief filed behalf of *12 the United suggests States, modify that we pre-emption our analysis rely on the dormant Indian Commerce Clause, § Art. I, 8, cl. 3, to hold that on-reservation activities involv-
ing a resident tribe are presumptively beyond the reach of state law even in the comprehensive absence of regu- federal placing lation, thus the burden on the State to demonstrate that its intrusion is either by Congress condoned justified by compelling a protect need legitimate, to specified state in- generalized terests other than the desire to collect revenue. argues He adopting approach this preferable for sev- eral provide it guidance reasons: would to the state courts ad- dressing these reducing issues, thus the case-by- need our case review of these decisions; it would avoid the tension 10We are similarly unpersuaded by the argument State’s signifi the cant provides services it to the Ramah Navajo justify Indians imposi tion of this tax. The State does not suggest that these benefits are in any way related to construction of schools on Indian land. Furthermore, the evidence introduced below by the State on this issue is far from clear. Although the provide State does services to the Ramah Navajo Indians, it receives federal funds providing some of these services, and the State conceded at trial that it saves approximately $380,000 by not having pro to vide education for the Ramah Navajo children. App. 95, 105-106, 108. regula- focusing pervasiveness federal on the created authority principal assertions of barrier to state a tion as encourage goal primary tribal self- is to federal when place self-government; and it would determination clearly particular- higher to articulate on the State burden taxing to demonstrate in transaction and ized interests assisting provides transaction. it taxed the services ap- necessary adopt this new not believe We do analysis governing existing pre-emption these proach—the many sufficiently ex- of the concerns cases is sensitive Although pressed rules and clearer the Solicitor General. simplifying litigation, promote presumptions interest scope pre-emption analysis announcing precedents our guidance provide to state courts sufficient area federal, consideration of also for more flexible allow consistently have ad- at issue. We state, and tribal interests relating regulations statutes and that federal monished generously in must be and tribal activities “construed tribes [Indian] comport sov- . . . traditional notions order to with policy encouraging ereignty federal and with the supra, independence.” Mountain, also 144; at see White Tax Comm’n, S., State v. Arizona McClanahan Trading Post v. Arizona Tax n. Co. 174-175, 13; Warren principle helps guiding This at 690-691. Comm’n, 380U. pervasiveness emphasizing between the tension relieve policy encouraging regulation In- federal and the *13 Although disap- we must admit our dian self-determination. apparently gave pointment short shrift that the below courts precedents principle area, we cannot and to our this presume courts will that state not follow both not do spirit in the future. of our decisions letter and the
HH HHHH comprehensive federal scheme sum, policy encouraging express tribal self-suffi- federal preclude imposition ciency in the area of education gross receipts tax in this case. Accordingly, judg- ment of the New Mexico Appeals Court of is reversed, and the case is remanded for proceedings further not inconsistent opinion. with this
It is so ordered. Justice Rehnquist, with whom Justice White and Jus- tice Stevens join, dissenting. The today reproves Court the New Mexico Ap- Court of peals failing precedents, heed our much disap- as a pointed parent would wayward rebuke a child.1 I do not think Appeals the Court of deserves the rebuke; seems to me that the state applied court precedents our at least as faithfully, and coherently, as the Court itself. In its desire to reach a result evidently that it quite finds salutary as a matter policy, the Court finds “indistinguishable” a case that is considerably off the mark, and it finds “pervasively regulated” activity largely free of regula- tion. ultimately It dependent accords a orga- Indian tribal greater nization immunity tax than it accorded the sover- eignty of the United States a short ago three months in a case involving precise state taxes at issue here.
I general The question presented by this case occupied has many Court times in past, recent and seems destined to demand its attention over again and over until the Court sees fit to articulate, and follow, a predictable consistent and rule of law. This question insistent concerns the extent to which the States can tax economicactivity on Indian reserva- tions within their borders. I believe the dominant trend of 1 “Although we must admit our disappointment that the courts ap below parently gave short shrift to this principle and to precedents our in this area, we cannot and do presume not that state courts will not follow both the letter and spirit of our decisions in the future.” Ante, at 846. *14 scope treating immu- reservation of toward our cases question nondiscriminatory a taxation as state nity from congressional ultimately dependent intent. on pre-emption, sovereignty the tradition of framework, a In such discriminatory taxes, independent to barrier stands as guide only to ascertainment as a serves otherwise congressional will. Apache Tribe Mountain principles in White announced
The (1980), this with consistent are S. 448 U. Bracker, v. recognized fed in Mountain the Court White Thus, trend.2 principal the assertion to barrier pre-emption aas eral authority and mem tribal reservations over challenged specifically invalidated the 142, at id., bers, 151, authority taxing id., basis, assertion recognized a in instances some also Court n. 15. The right infringes “‘the may invalid because state law ruled and be own laws make their Indians reservation (quoting Lee, v. 358 U. S. Williams at 142 Id., them.’” (1959)). in which apart instances those rare from But sovereignty attempts the residual interfere with the State of tribal govern members, the “tradition its own of a tribe against “backdrop” merely which the provides sovereignty” must be treaties as statutes pre-emptive effect of 143. at See sessed. principles homage today pays but then to these
The Court analytical framework a new promptly favors on bestows and not on the tribe, burden of economic extent which the appears regulations, to be the pre-emptive of federal effect necessary, a shift is paramount Such consideration. again suggested on- has 2 Nevertheless, the Solicitor General presump considered affecting resident tribes be activities reservation “principle by operation of state law tively beyond reach as Amicus Curiae 17-24. Brief for United States sovereignty.” See rejected, White Mountain. It has urged, suggestion was The same ease. appealing more
proved no *15 purported Court’s reliance on White Mountain will not with superficial scrutiny. stand even II
The Court “[t]his declares that indistinguishable case is all respects relevant from White Mountain.” Ante, at 839. This quite statement inaccurate. White Mountain in- attempt volved by the State of apply Arizona to its motor carrier license and use fuel logging operations taxes to the of a company doing non-Indian exclusively business on the reservation. The Court application concluded that of the State’s taxes was pervasive inconsistent with the regulation very activity subject to taxation. The repeatedly Court emphasized comprehensiveness regulations on which it relied. regulations,
“Under these the Bureau of Indian Af- fairs literally daily supervision exercises over the har- vesting management and of tribal timber. In the present case, [the contracts between organization] tribal [the and contractor] non-Indian approved by must be Bureau; indeed; the record shows that some of those con- by employees tracts were drafted of the Federal Govern- ment. employees regulate Bureau cutting, hauling, marking and [the organization timber tribal and the contractor]. The Bureau decides such matters as how much timber will be cut, which trees will be felled, which roads are to be used, hauling which equipment [the con- tractor] employ, speeds should logging which equipment may travel, length, and height, width, weight and of loads. Secretary
“The has promulgated also regula- detailed governing tions developed the roads the Bureau of In- dian Affairs. ... Apache On the Fort Reservation Forestry Department of required [the Bureau has organization] and its repair contractors ... and in some and existing tribal roads Bureau maintain high per- logging A... roads. new construct cases expended contractor’s] are [the centage of person- separate has maintained purposes, those relating variety carry of tasks equipment out nel 147-148. S., at 448 U. maintenance.” to road merely review not did White Mountain But the Court ipso regulations conclude, comprehensiveness of the *16 pre- operations logging were the taxes on that facto, specifics, to attention considerable empted. with found, It federal obstruct taxes would of state assessment “the policies.” at 148. Id,., threaten general would the taxes level,
“At the most guaranteeing objective Indi- overriding of federal the of they . . the whatever . benefit will ‘receive ans yielding. capable . . .’25 CFR forest] [the profit (1979). 141.3(a)(3) Underlying § the federal profits assuring de- the policy program rests of the the benefit inure to will from timber sales rived expenses incurred only subject administrative to Tribe . . . Government. the Federal the Secre- taxes undermine the would addition, “In range of determinations ability tary’s the wide to make setting concerning authority of fees the to his committed harvesting sale respect and to the rates with and approves the Secretary and reviews The timber. tribal contractors, agreements with Tribe’s terms by the Fed- Tribe to the rendered fees services for sets stumpage for rates determines Government, and eral notably in review- paid Most to the Tribe. timber [the writing contracts between ing terms agents contractors, organization] and its proper allo- predict determine the amount and must including expenses, costs. fuel business all cation throw additional would taxes of state assessment The factors into the reducing federal calculus, tribal revenues diminishing profitability enterprise po- of the tential contractors.
“Finally, imposition of state adversely taxes would ability affect comply the Tribe’s with the sustained- yield management policies imposed by federal law.” Id., at 149-150.
As noted, the Court thinks that “indistinguish- this case is respects able all relevant from White Mountain.” Ante, “[fjederal 839. It regulation finds that of the construction financing of Indian educational institutions is both com- prehensive pervasive.” regulations Ibid. But the which regulate the Court relies do not school construction, activity They which is by merely procedures taxed. detail may apply which tribes for federal carry funds order to out school construction. purpose
The regulations, quotes which the Court only part, give ante, at application “is 840-841, approval process obtaining a contract or services from Bureau previously for school private construction for schools *17 operated now by controlled and tribally approved tribes or organizations Indian (1981) §274.1 . . . .” (empha- 25 CFR added). regulations sis The explain proce- that follow the by may dures which complete, tribes applica- obtain, and file tion funding §§ forms for or services. 274.12-274.18. As the regulations Court observes, ante, at 841, the also au- approve thorize the BIA disapprove plans to specifica- and tions for construction as well as by construction contracts let the tribe, which are treated as funding subcontracts of the contract between the tribe and the BIA. The contracts are required to contain establishing a hiring preference clause a §274.38. for Indians. given And the BIA is to access the § tribe’s auditing purposes. records for 274.41. That is the regulations. extent of the
In this case BIA the “contracted” with the School Board in convey order to federal funds project. for the construction with “subcontract” approved construction the Board’s also It played in the selec- no role It contractor. construction the regulating or played role in no contractor of the tion Court The of the school. supervising actual construction the grant a than more is little which scheme, that this concludes application comprehensive fed- as the process, as at least “is Mountain.” pre-emptive in White to be found scheme eral agree. simply cannot I 841. Ante, at very sen- next in the important, the Court concludes
More by provided supervision the “[t]he direction tence schools construction the Government Federal sought im- to be burden additional for the room no leaves through of the taxation posed the State This 841-842. Ante, Board.” the paid Lembke to pre- Court’s total the sum constitutes statement Court the In Mountain analysis White emption case. to which the extent engaged examination in a detailed ability Secretary’s with both interfere would taxes tribe’s congressional with carry mandate out his to place care- policy. of such carry ability out federal ipse today does so dixit. It relies on analysis, Court ful concluding basis for no realistic is there because “pervasive” awith interfere taxes would State’s regulate simply construction not does The BIA scheme. provides federal It to tax. activity seeks the State which organizations and it estab- money eligible and tribal tribes auditing as a contract-approval mechanism lishes money put to the attempting to ensure means of is earmarked.3 which it use White this case and between distinctions ignores other The Court case, al latter contractor logging example, For
Mountain. exclusively harvest timber operated corporation, though a non-Indian *18 activities whatsoever. no off-reservation reservation; it conducted general building case is a in this contractor S., 139. The at See enjoy Mexico, of New throughout State doing business contractor enterprise in any as other commercial extent same to the ing services state
I—I I—I HH A careful reading the Court’s opinion demonstrates the single, determinative factor its judgment is the fact the challenged state have taxes increased the financial burden of constructing tribal school. Whether the federal regulations are detailed and comprehensive or largely a mat- ter of bookkeeping an irrelevancy, Court concludes the tax burden “impedes the clearly expressed federal interest promoting ‘quality quantity’ educational opportunities for Indians depleting available funds the construction Indian schools.” Ante, at 842 (emphasis added). The Court recognizes that the legal incidence of the tax is non-Indian contractor, but asserts that “in White Mountain ... we found it significant that the bur- economic den of the asserted taxes would ultimately fall on the Tribe, New Mexico. The Court dismisses this factor with the statement that “[plresumably, the state tax revenues derived from Lembke’s off-reserva- tion business activities are adequate to reimburse the State for the services provides Ante, Lembke.” n. 9. The Court’s “presumptions,” however, are no substitute for the judgment considered of the taxing state authority. Indeed, in assessing validity of a tax, the Court has previously recognized that the State’s are strongest interests when the taxpayer is the recipient of state services. See Washington v. Confeder- ated,Tribes Colville Reservation, (1980). 447 U. S. To the extent presumptions relevant, are the Court has inverted the one that ought apply.
Another distinction is also relevant. The activity taxed in WhiteMoun- tain exploitation was the of natural resources located on the reservation and devoted to the beneficial enjoyment use and of reservation Indians. Indeed, over 90%of the profits total generated by tribal enterprises were derived from the logging operations. Tribe’s 448 U. at 138. In this case, the state diminish, taxes not the income generated by the Tribe for its own preservation welfare, but federal appropriated funds by Con- gress for purpose of schoolconstruction. No tribal funds are devoted to this endeavor, congressional appropriations were based on funding requests that included the part tax as con- estimated struction cost. *19 854 the non- was on legal tax though of the incidence the
even n. 8. company.” 844, logging Ante, at Indian that “the indeed note did Mountain White The Court ultimately fall on will asserted taxes the burden of economic in footnote immedi- But at 151. 448 U. the Tribe.” today ignored, the following is ately sentence, which declared: Court of the burden fact that the economic course,
“Of by that the mean tax not itself Tribe does on the falls tax 425 Tribes, & Kootenai pre-empted, Moe v. Salish as is today (1976), Our decision makes clear. 468 S.U. comprehensive pre-emptive of the effect on based no room . . leaves regulatory . scheme, which by imposed sought be to burdens additional n. 151, 15. Id., law.” “comprehensive supposed
Despite to the references clearly the Court case, in this scheme pervasive” taxing re- Lembke’s from bar the State to has chosen imposes eco- an indirect principally tax ceipts because organization. theAs Court tribal on the burden nomic undeniably precedents view recognized, our Mountain White recognition an In- insufficient basis as Washington immunity. Tribes v. See tax dian Confederated (1980) 156 447 U. S. Reservation, Colville right infringe reservation Indi- (“Washington not does . . . ruled and be own laws ‘make their ans them/ imposing to de- merely its taxes will the result because currently they are receiv- which prive revenues Tribes of Tribes, U. S. ing”); & Kootenai v. Salish Moe (1976) cigarette Indians (upholding sales from on tax 481-482 legal was tax incidence because to non-Indians consumer); Apache Jones, v. S. Tribe Mescalero (1973) immunity despite imply (refusing tax 145, 156-157 enterprise).4 under the Even burden on economic steadfastly refused as immunity, the Court has areas of tax other imposes if burdens to the economic validity reference of a tax sess the
modified pre-emption form of applicable doctrine to state regulation of reservation activities, there must be some af- firmative Congress indication that did not intend the State to *20 exercise sovereign the power challenged in the suit. Until today, the mere fact that power the impose asserted will economic burden on a tribal provided endeavor has not that affirmative indication.
I disagree do not with the judgment Court’s congres- that sional enactments such as the Financing Act and the Indian Self-Determination and Education Assistance Act em- body a policy encouraging development the of Indian- controlled educational institutions. But it is a considerable leap to infer policy from that independent the principle that all state might laws which increase the cost of such an en- deavor are to be considered null and void. It perfectly is Congress conceivable that favored Indian education, but also contemplated all that costs obtaining that end would be paid in a normal fashion. State taxes are as much a normal cost of school construction as the cost of cement and labor. The cost of taxes was included in the bids submitted to the Board the construction contractors, and it apparently was also included in funding requests submitted the Board Congress. The Board be cannot faulted attempting stretch its federal construction funds as possible, far as but woefully that is a inadequate basis for interfering with sovereign prerogatives of the State of New Mexico.
I—I >
A short
ago,
three months
this Court considered whether
the State of New
impose
Mexico
could
those burdens are nondiscriminatory
comport
with due process.
See United States v. New Mexico,
(1982) (state
455 U. S. 720
taxation
of federal contractors); United States v. County
Fresno,
For these reasons, I dissent from the Court’s judgment. course, Of the Court purports to rest its decision on the pre-emptive effect of federal law. But the immunity of federal contractors from state taxes is also dependent on “generalized notions of federal supremacy.” United States v. New Mexico, supra, at 730. The question, critical both in United States v. New Mexico and in case, is what factors will the Court examine to determine whether the State has exceeded limits im posed by the Supremacy Clause and by Congress. *22 I think it is evident that in the area of federal tax immunity the Court has required evidence of more than mere economic burdens before it will invalidate a state tax as applied. As case demonstrates, tribal tax immunity may be invoked greater no showing than the fact of economic burdens on a federally sup ported tribal endeavor. Since both immunities derive from precisely the same source —the supremacy of federal law—I find the Court’s decision today inexplicable. “With the abandonment of the notion that the eco opposed nomic —as to the legal of the tax is relevant, it —incidence becomes difficult to maintain that federal tax immunity designed to insulate fed eral operations from the effects of state taxation.” United States v. New Mexico, supra, n. 11.