Harry Blackmun

“ Pre-emption is essentially a matter of congressional intent. In this case, our goal should be to determine whether the State's taxation of Cotton Petroleum's reservation oil production is consistent with federal Indian policy as expressed in relevant statutes and regulations. First and foremost, we must look to the statutory scheme Congress has established to govern the activity the State seeks to tax in order to see whether the statute itself expresses Congress' views on the question of state taxation. ”

“ The expectation that animated Indian policy under the General Allotment Act of 1887, ch. 119, 24 Stat. 388, was that at the expiration of a 25-year trust period, there would be no difference between Indians and other citizens: tribal life would come to an end, the Indians would be assimilated and fully subject to state governmental authority, Indian lands would be freely alienable to non-Indians and subject to state taxation, and surplus lands would be opened to private development. ”

“ The exclusion of all sense of proportion has led to a result that is antithetical to the concerns that animate our Indian pre-emption jurisprudence.
Finally, the majority sorely underestimates the degree to which state taxation of oil and gas production adversely affects the interests of the Jicarilla Apache. Assuming that the Tribe continues to tax oil and gas production at present levels, on-reservation taxes will remain 75% higher (14% as opposed to 8% of gross value) than off-reservation taxes within the State. ”

“ Even if we did not have such direct evidence of Congress' intent to preclude state taxation of non-Indian oil production on Indian lands, that conclusion would be amply supported by a routine application of the traditional tools of Indian pre-emption analysis. The majority concludes otherwise because it distorts the legal standard it purports to apply. ”

“ Even if Congress had considered Mountain Producers in enacting a bill that was silent as to state taxation, it would have been the prudent course for Congress, in view of the continued uncertainty of the law, to have used express language had it wished to perpetuate state tax authority.↑ The majority correctly notes, ante, at 178-180, that the Department of the Interior, in proposing this legislation, advised Congress of the need to change particular technical rules which had made Indian lands less favorable for mining than federal public lands. ”

“ The majority notes that when the pre-1938 mineral-leasing statutes were enacted (including the 1927 Act, 44 Stat. 1347, 25 U.S.C. § 398a et seq., which is of the greatest relevance here, see n. 2, supra ) , express congressional authorization was required not only for direct taxes on Indians (or other "sovereigns") , but also for taxes on those who contracted with Indians. See, e.g., Gillespie v. Oklahoma, 257 U.S. 501, 42 S.Ct. 171, 66 L.Ed. 338 (1922) (applying intergovernmental immunity doctrine to a tax on the net income of the non-Indian holder of a reservation mineral lease) . ”

“ Federal regulation of leasing of Indian oil lands "is both comprehensive and pervasive." Id., at 839, 102 S.Ct., at 3399. Provisions of the 1938 Act regulate all stages of the process of oil and gas leasing and production on Indian reservations. The auction or bidding process through which leases are acquired is supervised by the Department of the Interior. 25 U.S.C. § 396b. Successful lessees must furnish a bond to secure compliance with lease terms, § 396c, and each les ee's operations are in all respects subject to federal rules and regulations, § 396d. ”

“ The majority's reliance on the proposition that " [t] his is not a case in which the State has had nothing to do with the on-reservation activity, save tax it," ante, at 186, reflects a mechanical and absolutist approach to the delicate issue of pre-emption that this Court expressly has repudiated. ”

“ Our decisions have never required a case-specific showing that state taxation in fact has deterred tribal activity; the potential for conflict is sufficient.
The majority observes that this is not "a case in which an unusually large state tax has imposed a substantial burden on the Tribe," ante, at 186, and deems the tribal interest "indirect and . . . insubstantial," ante, at 187. But the majority does not explain why interferences with federal policy of only the dramatic magnitude of the tax at issue in Montana v. ”

“ Bracker, 448 U.S. 136, 141, 100 S.Ct. 2578, 2582, 65 L.Ed.2d 665 (1980) . The basic principles that define those boundaries are well established. The Court today, while faithfully reciting these principles, is less faithful in their application. ”