IN the UNITED STATES DISTRICT COURT for the NORTHERN DISTRICT of OKLAHOMA OSAGE NATION, ) ) Plaintiff, ) ) Case No.: 01-CV-0516

Case 4:01-cv-00516-JHP-FHM Document 76 Filed in USDC ND/OK on 06/30/2008 Page 1 of 30

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OKLAHOMA

OSAGE NATION, ) ) Plaintiff, ) ) Case No.: 01-CV-0516-JHP-FHM vs. ) ) THOMAS E. KEMP, JR., Chairman of ) the Oklahoma Tax Commission; JERRY ) JOHNSON, Vice-Chairman of the ) Oklahoma Tax Commission; and ) CONSTANCE IRBY, Secretary-Member ) of the Oklahoma Tax Commission, ) ) Defendants. )

RESPONSE BRIEF IN SUPPORT OF PLAINTIFF OSAGE NATION IN OPPOSITION TO MOTION TO DISMISS AND OPENING BRIEF IN SUPPORT OF MOTION TO DISMISS OF DEFENDANTS

PITCHLYNN & WILLIAMS, PLLC

GARY S. PITCHLYNN O. JOSEPH WILLIAMS 124 East Main Street P.O. Box 427 Norman, Oklahoma 73070 Telephone: (405) 360-9600 Facsimile: (405) 447-4219 Email: [email protected] [email protected]

June 30, 2008 Case 4:01-cv-00516-JHP-FHM Document 76 Filed in USDC ND/OK on 06/30/2008 Page 2 of 30

TABLE OF CONTENTS Page

INTRODUCTION ...... 1

Background on the Legal Implications of “Indian Country”...... 2 I. STANDARD ON MOTION TO DISMISS ...... 5

II. THE COURT HAS SUBJECT MATTER JURISDICTION ...... 6

III. THE NATION HAS STATED A CLAIM UPON WHICH RELIEF CAN BE GRANTED ...... 9

A. The Nation Does State a Claim Upon Which Relief Can be Granted Under the Legal Definition of Indian country, as defined by Congress at 18 U.S.C. § 1151 ...... 9

B. The Nation does State a Claim Upon Which Relief Can be Granted Under U.S. Treaty with the Osage Nation, Acts of Congress, and Federal Common Law and Policy Providing for the Establishment of the Nation’s Reservation Boundaries and Continued Existence as the Indian country of the Nation ...... 10

i. Oklahoma’s Entry into the Union Did Not Disestablish the Osage Reservation Boundaries ...... 12 ii. Allotment of Osage Reservation lands Did Not Disestablish the Reservation Boundaries ...... 14

The Osage Allotment Act ...... 17 C. The Nation Does State a Claim Upon Which Relief Can be Granted Under Federal Law that Tribal Members Who Both Reside and Earn Income Within Indian Country Are Exempt from State Income Taxes ...... 23 CONCLUSION ...... 24 CERTIFICATE OF SERVICE ...... 25

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TABLE OF AUTHORITIES Page

CASES

Bryan v. Itasca County , 426 U.S. 373 (1976) ...... 8

California v. Cabazon Band of Mission Indians , 480 U.S. 202 (1987) ...... 3, 8

City of Sherrill v. Oneida Indian Nation , 544 U.S. 197 (2004) ...... 12

County of Yakima v. Confederated Tribes and Bands of Yakima Nation , 502 U.S. 251 (1992) ...... 8

David v. City & County of Denver , 101 F.2d 1344 (10 th Cir. 1996) ...... 6

DeCoteau v. Distrect Court , 420 U.S. 425 (1975) ...... 3, 10, 16

Duggins v. Hunt , 323 F.2d 746 (10 th Cir. 1963) ...... 6

Hagen v. Utah , 510 U.S. 399 (1994) ...... 10, 11, 15, 18

Kennerly v. District Court , 400 U.S. 423 (1971)...... 3

Indian Country, U.S.A. v. State of Oklahoma , 829 F.2d 967 (10 th Cir. 1987) ...... 3, 4, 5, 13

Levindale Lead & Zinc Mining Company v. Coleman , 241 U.S. 432 (1916) ...... 18

Maryland Casualty Co. v. Pacific Coal & Oil Co. , 312 U.S. 270 (1941) ...... 6, 7

Mattz v. Arnett , 412 U.S. 481 (1973) ...... 10, 16, 17

McClanahan v. State Tax Commission of Arizona , 411 U.S. 164 (1973) ...... 4, 8, 23

Morton v. Ruiz , 415 U.S. 199 (1974) ...... 20

Oklahoma Tax Commission v. Chickasaw Nation , 515 U.S. 450 (1995) ...... passim

Oklahoma Tax Commission v. Citizen Potawatomi Indian Tribe of Oklahoma , 498 U.S. 505 (1991) ...... 4, 8

Oklahoma Tax Commission v. Sac and Fox Nation , 508 U.S. 114 (1993) ...... 3, 4, 8, 23

Powell v. McCormack , 395 U.S. 486 (1969) ...... 6

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Rosebud Sioux Tribe v. Kneip , 430 U.S. 584 (1977) ...... 10

Seymour v. Superintendent , 368 U.S. 351 (1962) ...... 10, 11, 15, 16

Skrzypczak v. Kauger , 92 F.3d 1050 (10 th Cir. 1996) ...... 5

Solem v. Bartlett , 465 U.S. 463 (1984) ...... passim

South Dakota v. Yankton Sioux Tribe , 522 U.S. 329 (1998) ...... 10, 16, 19

United States v. Celestine , 215 U.S. 278 (1909) ...... 11

United States v. Colorado Supreme Court , 87 F.3d 1161 (10 th Cir. 1996) ...... 5

United States v. John , 437 U.S. 634 (1978) ...... 3

United States v. Mazurie , 419 U.S. 544 (1974) ...... 8

United States Express Co. v. Friedman , 191 F. 673 (8 th Cir. 1911) ...... 13

CONSTITUTIONAL PROVISIONS

Oklahoma Constitution, art. XVII, sec. 8 ...... 14

Osage Nation Constitution, art. II ...... 12

FEDERAL STATUTES & REGULATIONS

18 U.S.C. § 1151 ...... passim

25 U.S.C. § 2701 ...... 20

25 U.S.C. § 2703(4)(A) ...... 20

28 U.S.C. § 2201 ...... 6, 7

28 U.S.C. § 2202 ...... 7

Act of April 25, 1940, 54 Stat. 168 ...... 24

Act of June 5, 1872, 17 Stat. 228 ...... 11, 22

Act of March 2, 1917, 39 Stat. 969 ...... 19

iii

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Act of May 25, 1918, 40 Stat. 561 ...... 19

Oklahoma Enabling Act, Act of June 16, 1906, 34 Stat. 267 ...... 12, 13, 14, 19

Osage Allotment Act, Act of June 28, 1906, 34 Stat. 539 ...... 11, 17, 18, 19

P.L. 108-431, 118 Stat. 2609 (2004) ...... 12, 20

FEDERAL RULES

Fed. R. Civ. P. 12(b)(1) ...... 5

Fed. R. Civ. P. 12(b)(6) ...... 5

Fed. R. Civ. P. 12(d) ...... 6

STATE STATUTES & REGULATIONS

OAC 710:50-15-2 ...... 23

OTHER AUTHORITIES

Environmental Protection Agency map ...... 21, 22

H.R. Rep. 108-502 (May 19, 2004) ...... 20

National Indian Gaming Commission opinion letter (July 28, 2005) ...... 20, 22

Oklahoma Executive Department Proclamation of Osage Day (Oct. 25, 1997) ...... 20, 21

Oklahoma Tax Commission Decision, 2006-05-04-23, N-01-025 ...... 24

Oklahoma Water Resources Board letter (Feb. 15, 1994) ...... 22

Opinion and Order of Sep. 28, 2005, Quarles v. U.S.A., et. al. , Case No.: 00-CV-0913, Docket No. 165 (N.D. Okla.) ...... 21

Stipulations of Fact, Osage Nation v. United States , Case No.: 99-550 L (U.S. Court of Federal Claims 2006) ...... 21

U.S. Department of Interior and U.S. Geological Survey map ...... 21

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OKLAHOMA

RESPONSE BRIEF IN SUPPORT OF PLAINTIFF OSAGE NATION IN OPPOSITION TO MOTION TO DISMISS AND OPENING BRIEF IN SUPPORT OF MOTION TO DISMISS OF DEFENDANTS

COMES NOW Plaintiff Osage Nation (the “Nation”), pursuant to the Court’s

Scheduling Order of March 27, 2008, and respectfully submits this response brief in

opposition to the motion to dismiss [Docket No. 72] filed in this case by Defendants Thomas

E. Kemp, Jr., as Chairman of the Oklahoma Tax Commission (“OTC”), Jerry Johnson, as

Vice-Chairman of the OTC, and Constance Irby, as Secretary-Member of the OTC

(collectively, “Defendants” or “Commissioners”). For the reasons provided in this brief in

opposition, the Nation requests the Court deny Defendants’ motion. In support of its

response, the Nation advises the Court as follows.

INTRODUCTION

Under well-established federal law, the State is without authority to levy and collect

taxes off the income of tribal members who both earn that income and reside in Indian Case 4:01-cv-00516-JHP-FHM Document 76 Filed in USDC ND/OK on 06/30/2008 Page 7 of 30

country. The Nation asserts that the Osage Indian Reservation, which shares the same

geographical boundaries as that of Osage County, Oklahoma, constitutes the Nation’s Indian

country. 1 The Commissioners do not dispute that they currently levy and collect income tax

from the Nation’s tribal members who both reside and earn income in Osage County, except

in situations when tribal members earn income and/or reside on trust or restricted land

located in Osage County. Since Indian country includes all land within an Indian

reservation, the Nation seeks to enjoin the Commissioners from continuing with the unlawful

practice of taxing the income of tribal members who both reside and earn that income

anywhere in the reservation. The Nation’s Second Amended Complaint has raised a claim

upon which this Court has subject matter jurisdiction and upon which this Court may grant

relief. Based on the legal authority and arguments presented herein, the Nation requests the

Court deny the Commissioners’ motion to dismiss.

Background on the Legal Implications of “Indian Country”

In their brief, the Commissioners appear to misconstrue the meaning and application

of “Indian country” as that term is defined by federal statute and applied in numerous

contexts in federal case decisions.

In 18 U.S.C. § 1151, Congress defines “Indian country” as the following:

Except as otherwise provided in sections 1154 and 1156 of this title, the term “Indian country,” as used in this chapter, means (a) all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation, (b) all dependent Indian communities within

1 Defendants mischaracterize the Nation’s claim as a claim requesting the Court enter an order to “restore” the Nation’s Reservation. That is not correct. The Nation asserts that the legal status of its reservation has never been altered by Congress and, as such, there is no need for this Court to “restore” the reservation. 2

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the borders of the United States whether within or without the limits of a state, and (c) all Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same.

Indian country is understood to define the territory where an Indian tribe or nation exercises

its powers of self-government. Indian country classification has been clearly identified as the

standard by which the division of federal, tribal, and state authority is made with respect to

Indians and Indian lands. See, e.g., California v. Cabazon Band of Mission Indians , 480 U.S.

202, 207 (1987); Solem v. Bartlett , 465 U.S. 463, 465 n.2 (1984); DeCoteau v. District

Court , 420 U.S. 425, 427-28 & n.2 (1975); Kennerly v. District Court , 400 U.S. 423 (1971);

Indian Country, U.S.A., Inc. v. State of Oklahoma , 829 F.2d 967, 973 (10 th Cir. 1987). The

classification applies to questions of both criminal and civil jurisdiction. See, e.g., United

States v. John , 437 U.S. 634 (1978) (criminal); DeCoteau , 420 U.S. at 428, n.2 (civil); Indian

Country, U.S.A. , 829 F.2d at 973 (application of Indian country classification applies to both

civil and criminal matters).

When considering whether certain land is Indian country, the U.S. Supreme Court has

determined that the appropriate inquiry starts with whether such land falls within one of the

categories outlined in 18 U.S.C. § 1151. “Congress has defined Indian country broadly to

include formal and informal reservations, dependent Indian communities, and Indian

allotments, whether restricted or held in trust by the United States.” Sac and Fox , 508 U.S. at

123 (citing Section 1151); see also Chickasaw Nation , 515 U.S. at 453 (“’Indian country,’ as

Congress comprehends that term, see 18 U.S.C. § 1151, includes ‘formal and informal

reservations’ . . .”). The Nation asserts that its Indian country consists of its reservation

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lands, and, pursuant to § 1151(a), that includes all land within the reservation boundaries, not

just restricted lands or lands held in trust within those boundaries.

Numerous U.S. Supreme Court decisions clearly recognize that Indian tribes are able

to seek federal court intervention against state governments who attempt to unlawfully

collect taxes occurring in Indian country. See, e.g., Oklahoma Tax Commission v. Chickasaw

Nation , 515 U.S. 450 (1995) (tribe seeks injunction against state collection of motor fuels tax

and income tax on tribal members in Indian country); Oklahoma Tax Commission v. Sac and

Fox Nation , 508 U.S. 114 (1993) (tribe seeks injunction against state collection of motor

vehicle excise tax and income tax on tribal members in Indian country); Oklahoma Tax

Commission v. Citizen Band Potawatomi Indian Tribe of Oklahoma , 498 U.S. 505 (1991)

(tribe seeks injunction against state collection of taxes for cigarettes sales in Indian country);

McClanahan v. State Tax Commission of Arizona , 411 U.S. 164 (1973) (tribe seeks

injunction against state collection of income taxes on tribal members in Indian country).

Moreover, the Tenth Circuit has previously ruled in favor of an Oklahoma Indian

tribe, the Muscogee (Creek) Nation, who sought federal court confirmation that its land is

Indian country and, from that confirmation, injunctive relief against the State of Oklahoma

from unlawfully asserting regulatory and taxation authority in Indian country. See Indian

Country, U.S.A. v. State of Oklahoma , 829 F.2d 967 (10 th Cir. 1987). The relief sought in

Indian Country, U.S.A. is notably similar to the instant case.

The Nation objects to the Commissioners’ assertion or implication that the Nation

seeks to “restore” the Osage Reservation to Indian country status. In its Second Amended

Complaint, the Nation makes it clear in its request for relief that, similar to the Creek Nation

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in Indian Country, U.S.A. , it seeks judicial confirmation that the Osage Reservation is

presently Indian country. The U.S. Supreme Court has held that only Congress can divest

Indian country lands of its status and until that happens, the lands retain the legal status of

Indian country regardless of any past failure to challenge unlawful state jurisdiction. Solem v.

Bartlett , 465 U.S. 463, 470 (1984); see also Indian Country, U.S.A. , 829 F.2d at 974 (“[T]he

past failure to challenge Oklahoma’s jurisdiction over Creek Nation lands, or to treat them as

reservation lands, does not divest the federal government of its exclusive authority over

relations with the Creek Nation or negate Congress’ intent to protect Creek tribal lands and

Creek governance with respect to those lands.”). For its claim, the Nation seeks judicial

recognition that the Osage Reservation is presently Indian country, as it has never lost its

status as Indian country since Congress established the reservation for the Nation in 1872

(further explained herein) and, from that judicial confirmation, enjoin the Commissioners

from their unlawful taxation practices in the Nation’s Indian country.

I. STANDARD ON MOTION TO DISMISS

A motion to dismiss under Fed.R.Civ.P. 12(b)(1) should be granted only when it

appears beyond doubt that the plaintiff could prove no set of facts entitling it to relief. United

States v. Colorado Supreme Court , 87 F.3d 1161, 1164 (10 th Cir. 1996). In considering a

motion to dismiss, the Court must accept as true all well-pleaded facts and construe all

reasonable allegations in the light most favorable to the plaintiff. Skrzypczak v. Kauger , 92

F.3d 1050, 1053 (10 th Cir. 1996).

Similarly, in considering a motion to dismiss under Fed.R.Civ.P. 12(b)(6), this Court

must accept the well-pled allegations in plaintiff’s complaint as true and construe them most

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favorably to plaintiff. David v. City & County of Denver , 101 F.3d 1344, 1352 (10 th Cir.

1996). However, when a party files a motion to dismiss under Fed.R.Civ.P. 12(b)(6) and

includes matters outside the pleading that are not excluded by the Court, the motion shall be

treated as one for summary judgment and disposed of as provided in Rule 56 of the Federal

Rules of Civil Procedure. Fed.R.Civ.P. 12(d). The Nation is mindful that the Commissioners

have supported their motion with documents that are allegedly contrary to the Nation’s claim

on the merits. To the extent the Court does not exclude these documents and treats the

Commissioners’ motion as one for summary judgment, the Nation responds accordingly and

requests the Court deny the motion. However, if the Court intends to treat the

Commissioners' motion as one for summary judgment, the Nation requests it be given

reasonable opportunity to present all material pertinent to such a motion in accordance with

Fed.R.Civ.P. 12(d).

II. THE COURT HAS SUBJECT MATTER JURISDICTION.

Generally, the purpose of the Declaratory Judgment Act, 28 U.S.C. § 2201, is to give

federal courts a discretionary tool to provide parties with “an immediate forum for the

adjudication of rights and obligations in actual controversy where such controversy may be

settled in its entirety and with expediency and economy.” Duggins v. Hunt , 323 F.2d 746,

748 (10 th Cir. 1963). It is well established that a court may grant declaratory relief despite a

decision not to grant injunctive or mandamus relief; moreover, a declaratory judgment can be

used as the basis for a court to provide additional relief. Powell v. McCormack, 395 U.S.

486, 499 (1969). A court may grant declaratory relief so long as the court finds an actual

Article III case or controversy. Maryland Casualty Co. v. Pacific Coal & Oil Co. , 312 U.S.

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270, 272 (1941). The existence of an “actual controversy” within the meaning of the Act is a

fact-based inquiry; rather than relying upon a categorical test, a court should ask whether

“the facts alleged, under all the circumstances, show that there is a substantial controversy,

between parties having adverse legal interests, of sufficient immediacy and reality to warrant

the issuance of a declaratory judgment.” Id. at 273.

In this case, not only do the Plaintiff and Defendants have adverse legal interests,

those interests are sufficiently immediate and real to warrant the requested declaratory

action. The Nation has sufficiently articulated the claim (and the Commissioners even

concede in their brief) that the Commissioners do not recognize the Indian country status of

the entire Osage Reservation. As such, the Commissioners continue to levy and collect taxes

from the income of Osage tribal members who both reside and earn that income within the

Nation’s reservation boundaries, except for those tribal members who live and/or earn

income on trust or restricted lands.

The Nation has Article III standing to raise its claims. The Nation does not seek relief

against the Commissioners, as alleged by Commissioners in their brief, “to establish its

reservation still exists.” Rather, the Nation seeks a declaratory judgment under the

Declaratory Judgment Act and requests the Court to “declare the rights and other legal

relations” as to the status of the Nation’s reservation boundaries. 28 U.S.C. § 2201(a). From

that declaration the Nation requests further relief, as permitted by 28 U.S.C. § 2202, against

the Commissioners in the form of an injunction against further unlawful taxation in the

Nation’s Indian country.

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As to the injunctive relief request, the Nation can easily demonstrate that it suffers an

injury in fact to meet the standing requirement. The U.S. Supreme Court “has consistently

recognized that Indian tribes retain ‘attributes of sovereignty over both their members and

their territory,’ . . . and that ‘tribal sovereignty is dependent on, and subordinate to, only the

Federal Government, not the States.’” California v. Cabazon Band of Mission Indians , 480

U.S. 202, 207 (1987) (quoting United States v. Mazurie , 419 U.S. 544, 557 (1975)). There is

well-established federal law that has developed into a categorical rule: absent cession of

jurisdiction or authorized by Congress, a state is without power to tax reservation lands and

reservation Indians. Oklahoma Tax Commission v. Chickasaw Nation , 515 U.S. 450, 458

(1995); County of Yakima v. Confederated Tribes and Bands of Yakima Nation , 502 U.S.

251, 258 (1992). The U.S. Supreme Court has held unenforceable state taxes whose legal

incidence fell on a tribe or on tribal members inside Indian country. See, e.g., Bryan v. Itasca

County , 426 U.S. 373 (1976); McClanahan v. Arizona , 411 U.S. 164 (1973). When a state

seeks to impose taxes upon tribal members within a reservation without their consent, such

action infringes on tribal self-government and autonomy from state interference within their

Indian country. See, e.g., McClanahan , 411 U.S. at 179.

Against the backdrop of tribal sovereignty over their territory and tribal members,

precedent exists for tribes seeking to enjoin unlawful state taxation on behalf of tribal

members. See, e.g., Oklahoma Tax Commission v. Chickasaw Nation , 515 U.S. 450 (1995);

Oklahoma Tax Commission v. Sac and Fox Nation , 508 U.S. 114 (1993); Oklahoma Tax

Commission v. Citizen Band Potawatomi Indian Tribe of Oklahoma , 498 U.S. 505 (1991);

McClanahan v. State Tax Commission of Arizona , 411 U.S. 164 (1973).

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The continued unlawful taxation against tribal members in the Nation’s Indian

country currently infringes on an actual, legally protected interest clearly recognized under

federal law and, unless the Commissioners are enjoined from continuing that action, the

Nation will continue to suffer this unlawful infringement within its territory. The Nation has

standing to raise its claims.

III. THE NATION HAS STATED A CLAIM UPON WHICH RELIEF CAN BE GRANTED.

The Commissioners’ argument that the Nation has failed to state a claim upon which

relief can be granted is without merit. The Nation addresses the Commissioners’

propositions in turn.

A. The Nation Does State a Claim Under Which Relief Can be Granted Under the Legal Definition of Indian country, as defined by Congress at 18 U.S.C. § 1151.

Contrary to the Commissioners’ assumption, the Nation is not attempting to state a

claim, per se, under the Major Crimes Act. Rather, the Nation’s reference to 18 U.S.C. §

1151 in its Second Amended Complaint refers to the statutory definition of “Indian country,”

a term that has been so widely accepted in federal Indian law jurisprudence as the basis for

determining the territory by which an Indian tribe exercises its sovereign powers of self-

government. See supra . It thus appears that many of Defendants’ legal premises that the

Nation fails to state a claim upon which relief can be granted are based on a faulty

application (or misunderstanding) of the legal term “Indian country” as defined in 18 U.S.C.

§ 1151. To the extent the Nation seeks injunctive relief against the Commissioners for

unlawful taxation activity occurring in the Nation’s Indian country, the statutory definition of

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Indian country, and the case law applying that definition in disputes involving unlawful state

taxation activity, is plainly relevant and properly serves as a basis for the Nation’s claims.

B. The Nation Does State a Claim Upon Which Relief Can be Granted Under U.S. Treaty with the Osage Nation, Acts of Congress, and Federal Common Law and Policy Providing for the Establishment of the Nation’s Reservation Boundaries and Continued Existence as the Indian country of the Nation.

The Commissioners have failed to provide legal authority, binding or otherwise,

holding that a federal court is not the proper forum to adjudicate a dispute regarding the

status of reservation boundaries. To the contrary, since only Congress can disestablish

reservation boundaries, any question regarding the continued status of reservation boundaries

is a matter of federal law and an issue appropriate for adjudication in federal court. See, e.g.,

South Dakota v. Yankton Sioux Tribe , 522 U.S. 329 (1998); Hagen v. Utah , 510 U.S. 399

(1994); Solem v. Bartlett , 465 U.S. 463 (1984); Rosebud Sioux Tribe v. Kneip , 430 U.S. 584

(1977); DeCoteau v. District Court , 420 U.S. 425 (1975); Mattz v. Arnett , 412 U.S. 481

(1973); Seymour v. Superintendent , 368 U.S. 351 (1962).

The U.S. Supreme Court has developed an analytical framework for determining the

continuing status of reservation boundaries after allotment. According to its own precedent,

the Court has provided “‘a fairly clean analytical structure’ directing us to look to three

factors.” Hagen v. Utah , 510 U.S. at 411-12 (quoting Solem , 465 U.S. at 470). First, “[t]he

most probative evidence of diminishment is, of course, the statutory language used to open

the Indian lands. [citation omitted]. Id . Second, “[w]e have also considered the historical

context surrounding the passage of the surplus land Acts, although we have been careful to

distinguish between evidence of the contemporaneous understanding of the particular Act

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and matters occurring subsequent to the Act’s passage.” Id . “Finally, ‘[o]n a more pragmatic

level, we have recognized that who actually moved onto opened reservation lands is also

relevant to deciding whether a surplus land Act diminished a reservation.” Id .

By the Act of June 5, 1872, ch. 310, 17 Stat. 228, Congress established for the Nation

a reservation of lands within the (former) Indian Territory in Oklahoma. The Act, titled “An

Act to confirm to the Great and Little Osage Indians a Reservation in the Indian Territory,”

provides in pertinent part:

That in order to provide said Osage tribe of Indians with a reservation, and secure to them a sufficient quantity of land suitable for cultivation, the following described tract of country, west of the established ninety-sixth meridian, in the Indian Territory, be, and the same is hereby, set apart for and confirmed as their reservation, namely: Bounded on the east by the ninety- sixth meridian, on the south and west by the north line of the Creek country and the main channel of the Arkansas river, and on the north by the south line of the State of Kansas . . . .

Since the Nation’s reservation was established in 1872, the Nation has occupied and

maintained a continuous presence in its reservation with its governmental headquarters

currently located in Pawhuska, Oklahoma. Admittedly, many lands within the Osage

Reservation are owned in fee by non-Indians 2; however, evidence of Osage culture, history

and governance over the reservation lands are present today throughout the entire Osage

County. 3 Since the Osage Allotment Act of 1906, the entire subsurface mineral estate of the

2 This fact alone does not support any finding that the Osage Reservation boundaries are disestablished. See Seymour v. Superintendent , 368 U.S. 351, 358-59 (1962) (holding that the reservation boundaries are not diminished simply because there exists townships or other non-Indian fee land within the exterior boundaries of the reservation.). “Once a block of land is set aside for an Indian reservation and no matter what happens to the title of individual plots within the area, the entire block retains its reservation status until Congress explicitly indicates otherwise.” Solem v. Bartlett , 465 U.S. 463 (1984) (citing United States v. Celestine , 215 U.S. 278 (1909)). 3 For example, attached as Exhibit “1” is a picture of a sign on the side of State Highway 60 Eastbound situated on the Osage Reservation boundary that states “YOU ARE ENTERING THE OSAGE NATION 11

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Osage Reservation (“Osage Mineral Estate”) has been held in trust for the Osage Nation with

mineral royalties belonging to Osage headright owners under a system established by federal

law. The federal government is the trustee for the Osage Minerals Estate. In 2004, Congress

enacted “An Act to reaffirm the inherent sovereign rights of the Osage Tribe to determine its

membership and form of government.” P.L. 108-431, 118 Stat. 2609. Through this Act, the

Nation developed and adopted its own constitution that provided for its own form of

government and reaffirmed the extent of its governmental authority over its territory. Prior

to this, the Nation’s governmental powers and authority over its affairs in its reservation

were defined by acts of Congress. In Article II of the Nation’s Constitution (attached hereto

as Exhibit “2”), the Nation continues to acknowledge the reservation boundaries established

in 1872 as the sovereign territory of the Nation by and through which the Nation exercises its

powers of self-government. The 2004 Act did nothing to lessen any federal superintendence

over the Osage Reservation, but, rather, the Act simply reaffirmed the sovereign authority of

the Nation to exercise powers of self-government on its own instead of through acts of

Congress. 4

i. Oklahoma’s Entry into the Union Did Not Disestablish the Osage Reservation Boundaries.

The Commissioners’ argument that Oklahoma’s entry into the Union disestablished

the Osage Reservation boundaries is without merit. The Oklahoma Enabling Act, an act of

RESERVATION.” On information and belief, this sign, and other similar signs located on the other major highways entering the reservation, were erected by the Oklahoma Department of Transportation. 4 Unlike the Oneida Indian Nation in City of Sherrill v. Oneida Indian Nation , 544 U.S. 197 (2004) (cited by Commissioners), the Osage Nation has occupied and maintained a continuous presence in their reservation since before Oklahoma’s statehood. Further, the Nation is not basing its claim on newly acquired parcels of land purchased on the open market upon which the Nation now claims aboriginal title; rather, the Nation’s claim for relief concerns the prohibition recognized by federal law against unlawful state taxation on tribal members within Indian country. 12

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Congress admitting Oklahoma into the Union in 1906, specifically preserved federal

authority over Indians, Indian lands, property, and other rights by treaties or other

agreements. See Oklahoma Enabling Act, ch. 3335, § 1, 34 Stat. 267, 267-68 (1906). In fact,

four years after Oklahoma’s statehood, a federal appellate court expressly rejected the

proposition that Oklahoma’s entry into the Union dissolved all Indian country within the

(former) Indian Territory. United States Express Co. v. Friedman , 191 F. 673, 679-80 (8 th

Cir. 1911) (“[T]he states are equal in power, and a new state, when admitted, is clothed with

all the powers of the original states [citations omitted]; but the power of Congress over

Indian relations is plenary and has no relation to state lines . . . .”).5

Moreover, there are other sections within the Oklahoma Enabling Act that reference

the continual existence of the Osage Reservation after statehood. Section 2 of the Oklahoma

Enabling Act provides in pertinent part:

[A]nd all persons qualified to vote for said delegates shall be eligible to serve as delegates; and the delegates to form such convention shall be one hundred and twelve in number, fifty-five of whom shall be elected by the people of Indian Territory, and two shall be elected by the electors residing in the Osage Indian Reservation in the Territory of Oklahoma; and the governor, the chief justice, and the secretary of the Territory of Oklahoma shall apportion the Territory of Oklahoma into fifty-six districts, as nearly equal in population as may be, except that such apportionment shall include as one district the Osage Indian Reservation , and the governor, the chief justice, and the secretary of the Territory of Oklahoma shall appoint an election commissioner who shall establish voting precincts in said Osage Indian Reservation , and shall appoint the judges for election in said Osage Indian Reservation ; and two delegates shall be elected from said Osage district . . . [t]hat in said Indian Territory

5 The Tenth Circuit in Indian Country, U.S.A. specifically referenced the effect of the Oklahoma Enabling Act to Indian interests in the newly formed State and noted: “The language of the Oklahoma [Enabling Act], read in its historical context, suggests that Congress intended to preserve its jurisdiction and authority over Indians and their lands in the new State of Oklahoma until it accomplished the eventual goal of terminating the tribal governments, assimilating the Indians, and dissolving completely the tribally-owned land base—events that never occurred and goals that Congress later expressly repudiated.” Indian Country, U.S.A. , 829 F.2d at 979-80. 13

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and Osage Indian Reservation , nominations for delegate to said constitutional convention may be made by convention . . . .

(emphasis added).

Section 3 of the Enabling Act provides:

Second. That the manufacture, sale, barter, giving away, or otherwise furnishing, except as hereinafter provided, of intoxicating liquors within those parts of said State now known as the Indian Territory and the Osage Indian Reservation and within any other parts of said State which existed as Indian reservations . . . . 20

(emphasis added).

Section 21 of the Enabling Act provides:

That the constitutional convention may by ordinance provide for the election of officers for a full State government, including members of the legislature and five Representatives to Congress, and shall constitute the Osage Indian Reservation a separate county, and provide that it shall remain a separate county until the lands in the Osage Indian Reservation are allotted in severalty and until changed by the legislature of Oklahoma, and designate the county seat thereof . . . .

34 Stat. 267, 268-69, 277 (emphasis added). The direction under § 21 of the Enabling Act

was carried out in Art. XVII, sec. 8 of the Constitution of the State of Oklahoma which

provides that “ [t]he Osage Indian Reservation with its present boundaries is hereby

constituted one county to be known as Osage County . . . Pawhuska is hereby designated the

County Seat of Osage County.” To date, the Oklahoma Constitution still has this language.

20 Notably, the language in the Oklahoma Enabling Act references the Osage Indian Reservation as a whole without distinguishing between any allotted parcels of land within the reservation. Also, section 3 of the Enabling Act clearly references the Osage Indian Reservation in its present tense form (“now known as . . . the Osage Indian Reservation . . . .”) while making reference to other Indian reservations in Oklahoma in a past tense form (“other parts of said State which existed as Indian reservations . . . .”). Clearly, Congress did not intend for the Enabling Act to be the basis for terminating the Osage Reservation upon Oklahoma’s entry into the Union. 14

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ii. Allotment of Osage Reservation lands Did Not Disestablish the Reservation Boundaries.

As stated supra , the first and primary factor the Court uses to determine if a

reservation has been disestablished is to review the statutory language used to open the

Indian lands. In Solem , the Court acknowledged that “only Congress can divest a reservation

of its land and diminish its boundaries” and that “[t]he most probative evidence of

congressional intent is the statutory language used to open the Indian lands.” Solem , 465 U.S.

at 470. A review of the statutory language used to open the lands has always been present in

the reservation status cases and has always been the first and foremost starting point

implemented by the Court for their analysis.

The most conclusive rule comes from Hagen where the Court held that language of

“the restoration of unallotted lands to the public domain evidences a congressional intent

with respect to those lands inconsistent with the continuation of reservation status.” Hagen ,

510 U.S. at 414. Further, such language must be in the “operative section” of a surplus land

act. Id . Notably, in Solem , the Court held that an Act that granted permission for the Indians

to harvest timber on the opened lands “as long as the lands remain part of the public domain”

did not diminish the reservation boundaries. Solem , 465 U.S. at 475. However, in reference

to the term “public domain” in Solem , the Court in Hagen pointed out that the language did

not “restore” the lands to the public domain and such language was not in the operative

section of the statute opening the lands for settlement. Hagen , 510 U.S. at 413. This is

entirely consistent with the holding in Seymour where the Court held that the use of the

language “vacated and restored to the public domain” in an 1892 Act had diminished the

Colville Reservation as to the North Half but not as to the South Half of the reservation since 15

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no such language was used in the 1906 Act referencing the South Half. Seymour , 368 U.S. at

354.

In Yankton Sioux , the Court held that when the surplus land act contains “both explicit

language of cession, evidencing ‘the present and total surrender of all tribal interests,’ and a

provision for a fixed-sum payment, representing ‘an unconditional commitment from

Congress to compensate the Indian tribe for its opened land,’ a ‘nearly conclusive,’ or

‘almost insurmountable,’ presumption of diminishment arises.” Id . This is referred to as the

“cession and sum certain” language and is viewed as being “‘precisely suited’ to terminating

reservation status.” Id . (quoting DeCoteau , 420 U.S. at 445).

Likewise, in DeCoteau , the Court determined that negotiations between the Indians

and the United States leading to the 1889 Agreement plainly indicate that the Indians were

willing to convey all of their interest in all of their unallotted lands to the Government for a

sum certain. DeCoteau , 420 U.S. at 445.

In the cases where the Supreme Court held that the reservation boundaries were not

diminished or terminated, different language is used to open the lands. In Seymour , the 1906

Act provided for the sale of mineral lands and for the settlement and entry under the

homestead laws. Seymour , 368 U.S. at 355. The proceeds from the disposition of those lands

would be deposited in the U.S. Treasury for the benefit of the tribe. Id . The Court considered

this language and determined that the Act did no more than open the way for non-Indians to

settle on the opened land. Id . at 356. In Mattz , the Court considered the language in the 1892

Act to be similar to the terms outlined in the General Allotment Act of 1887 that permitted

the President to make allotments of reservation lands to Indians and, with tribal consent, to

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sell surplus lands. Mattz , 412 U.S. at 498. In Solem , there was no language describing an

Indian agreement to “cede, sell, relinquish and convey” the opened lands, but rather, the

Cheyenne River Act simply authorized the Secretary of the Interior to “sell and dispose” of

certain lands. Solem , 465 U.S. at 473. There was also created an account for proceeds of the

sale to be set aside for the benefit of the tribe. Id . The Court in Solem suggested that in this

manner, “the Secretary of the Interior was simply being authorized to act as the Tribe’s sales

agent.” Id .

The Osage Allotment Act

On June 28, 1906, 34 Stat. 539, Congress enacted “An Act For the division of the

lands and funds of the Osage Indians in Oklahoma Territory, and for other purposes” (the

“Osage Allotment Act”).6 A review of the Osage Allotment Act in its operative language

and in its entirety indicates that the Osage Reservation was never opened up to non-Indian

settlement, but, rather, was to be divided up fairly and equally as practicable among the

Osage tribal members. The Osage Allotment Act provided, among other things, that each

member of the tribe was to make three selections of 160 acres each, one of which would be

designated as a homestead “inalienable and nontaxable until otherwise provided by act of

Congress.” Act of June 28, 1906, 34 Stat. 539, 541. The other two selections would be

designated surplus land for each tribal member. After each Osage member made three

selections of 160 acres each, the remaining tribal lands in the Osage Reservation, except as

otherwise provided in the Act, were to be divided as equally as possible among the tribal

6 It is important to note that, unlike the “surplus land” acts referenced in the other cases, the Osage Allotment Act did not actually provide for surplus lands for non-Indian settlement since the entire reservation lands, with some minor exceptions for existing government property, were allotted among all Osage tribal members. 17

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members by a commission to be appointed. Id . The two non-homestead selections of each

member along with the share of the remaining lands allotted to each member, would be

known as surplus land, to be inalienable for twenty-five years. Id .7

Unlike the statutory language used in Hagen v. Utah , nothing in the Act, in its

operative language or otherwise, “restores” the lands of the Osage Nation to the “public

domain” that would evidence a congressional intent to terminate or diminish the Osage

Reservation. To the contrary, the Act clearly provides for the lands of the Osage Reservation

to be divided equally as practicable among the Osage tribal members, rather than to the

public domain. See 34 Stat. 539, 540. Lands not set aside for allotment for tribal members

could later be sold at the Nation’s discretion, with the proceeds of the sale going back to the

Osage members. Id . at 543. Nothing in the Act resembles a “cession” of the Osage lands for

a “sum certain.” The cemetery reserve given to the town of Pawhuska had to be used as a

cemetery or else the site would revert back to the use and benefit of the Osage members. Id .

Finally, the railroad companies’ use and benefit of lands in the Osage Reservation for various

railroad purposes was conditioned by the railroad companies not being able to acquire right

or title to any oil, gas, or other mineral in any of those lands, since such rights were reserved

for the Osage tribe and its members. Id . at 545.

Moreover, nothing in the Osage Allotment Act even hints at the Osage agreeing to

surrender their tribal interest in the Osage Reservation lands for a “sum certain” payment as

7 After the Act, some Osage allotted land would transfer to fee status and out of Indian ownership through the passage of time to make the land alienable, by the allottee being certified for competency to alienate the land or otherwise. See e.g., Levindale Lead & Zinc Mining Company v. Coleman , 241 U.S. 432 (1916) (holding that restrictions on alienation of Osage allotments imposed by 1906 Act do not apply to lands in possession of a non-Indian man whose deceased wife held allotment). 18

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seen in Yankton Sioux . On the face of this statute, it is clear that Congress was only

providing a vehicle whereby tribal members could sell their surplus land, as opposed to their

homestead land, that they were allotted out of the reservation. Notably, the statute does not

include language that the surplus land would be restored to the public domain or that the

surplus land was being ceded by the tribe to the United States for non-Indian settlement.

Rather, the statute allows, upon application , surplus land to be sold by the Secretary of the

Interior. In this regard, the reference to the sale of surplus lands in the language of this

statute is similar to the situation in Solem v. Bartlett where the Court stated that the

“Secretary of the Interior was simply being authorized to act as the Tribe’s sales agent.”

Solem , 465 U.S. at 473.

A review of the other two factors to consider, the historical treatment of the land and

other pragmatic considerations, weigh in favor of the continued existence of the Osage

Reservation boundaries. The most significant historical consideration is that the Osage

Allotment Act was enacted by the same Congress (and during the same month) that enacted

the Oklahoma Enabling Act, which recognized the continued existence of the Osage Indian

Reservation within the newly formed State of Oklahoma. Also, several acts of Congress

enacted subsequent to the Osage Allotment Act continue to recognize the status of the Osage

Reservation as land set aside by the United States for the use and benefit of the Osage,

consistent with reservation status. 8

8 For example, the Act of March 2, 1917, 39 Stat. 969, provides “[t]hat all of Osage County, Oklahoma, shall hereafter be deemed to be Indian count[r]y within the meaning of the Acts of Congress making it unlawful to introduce intoxicating liquors into the Indian country.” Also, the Act of May 25, 1918, 40 Stat. 561, provides, inter alia , that “[t]he receipts from leasing of oil, gas, and other minerals upon the lands of the Osage Reservation , until the same are paid out as provided by existing law, may be 19

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Other notable acknowledgements of the current status of the Osage Reservation:

1. On July 28, 2005, upon an official inquiry by the National Indian Gaming

Commission (“NIGC”), 9 the NIGC concluded by an opinion letter that the Nation “may

conduct gaming on the parcels because they lie within the Tribe’s reservation.” The opinion

states that its conclusion was based on historical documents and official records from the

U.S. Department of the Interior acknowledging that the Osage Reservation boundaries have

not been disestablished. A copy of the NIGC opinion is attached hereto as Exhibit “3.”

2. The State of Oklahoma has on its own accord recognized that the boundaries

of Osage County make up the Osage Indian Reservation. On October 25, 1997, the

Governor of Oklahoma signed an Executive Department Proclamation recognizing the day

celebrated as the Osage Centennial and declaring the day as “Osage Day.” Among other

things, the Proclamation states:

Whereas, the Osage Reservation covering all of Osage County is the only federally recognized reservation remaining in Oklahoma; and Whereas, the Osage Tribe Mineral Estate occupies all of Osage County . . . .

deposited in national or State banks in Oklahoma, in the discretion of the Secretary of the Interior . . . .” Finally, as recently as December, 2004, Congress enacted “An Act to reaffirm the inherent sovereign rights of the Osage Tribe to determine its membership and form of government.” P.L. 108-431, 118 Stat. 2609. The legislative history for this act specifically states that “[t]he Osage Tribe is a federally recognized tribe with a nearly 1.5 million-acre reservation in northeast Oklahoma” with a full committee hearing on H.R. 2912 being “held on the Osage Reservation on March 15, 2004.” H.R. Rep. 108-502. 9 The National Indian Gaming Commission is a federal agency within the U.S. Department of the Interior, created by the Indian Gaming Regulatory Act, 25 U.S.C. § 2701, et seq . (the “IGRA”), to regulate certain Indian gaming activity that occurs on, among other things, land within Indian reservations. See 25 U.S.C. § 2703(4)(A). The NIGC’s determination is significant because: (1) it necessarily concludes that no act of Congress has disestablished the Osage Reservation boundaries, and (2) in order for the NIGC to permit gaming in the reservation it necessarily has to also find that the Nation maintains powers of governance and authority over all lands within the reservation boundaries in order to lawfully conduct Indian gaming under the IGRA, dispelling any arguments by the State that the Nation’s governance powers over the reservation were diminished over time. In the area of Indian affairs, deference should be given to rule and policy determinations made by the Department of Interior and Bureau of Indian Affairs. Morton v. Ruiz , 415 U.S. 199, 231 (1974). 20

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Notably, the Proclamation references the Osage Reservation and the Osage Mineral Estate

separately, acknowledging a distinction between the two terms. A copy of the 1997

Proclamation is attached hereto as Exhibit “4.”

3. In Osage Nation v. United States , the United States Court of Federal Claims,

Case No.: 99-550 L, attorneys with the U.S. Department of Justice and U.S. Department of

the Interior entered into Stipulations of Fact with attorneys for the Nation that provides in

paragraph two: “The Osage Reservation is located in northern Oklahoma. The Reservation

covers roughly 1.47 million acres. The boundaries of the Osage Reservation are co-

extensive with the boundaries of present-day Osage County, Oklahoma.” This fact was

adopted by the Court and incorporated in its written order filed in that case on September 21,

2006. A copy of the Stipulations of Fact are attached hereto as Exhibit “5.”

4. On September 28, 2005, in a Opinion and Order issued in Quarles v. U.S.A.,

et al ., U.S. District Court for the Northern District of Oklahoma, Case No.: 00-CV-0913-

CVE-PJC [Docket No. 165], District Judge Eagan specifically finds that “Osage County is

‘Indian country,’ as defined by 18 U.S.C. § 1151, and falls under the supervision of the

[Bureau of Indian Affairs].” Opinion and Order , at page 3. Notably, the Bureau of Indian

Affairs, who was at one time a party to this litigation, did not dispute or object on the record

to this finding by Judge Eagan.

5. Attached as Exhibit “6” is a copy of a map produced by the U.S. Department

of the Interior and the U.S. Geological Survey showing the Osage Indian Reservation as the

only Indian reservation in Oklahoma. The U.S. Environmental Protection Agency has a

website showing a map produced by the Bureau of Indian Affairs that clearly depicts the

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Osage Reservation as a federally-recognized reservation. The website is:

http://www.epa.gov/pmdesignations/biamap.htm

6. A letter, dated February 15, 1994, from a Regional Office of the Office of the

Solicitor, to the Oklahoma Water Resources Board (the “Board”), provides notice to the

Board that the state agency “has no jurisdiction or authority to adjudicate the rights of the

Osage Tribe to use the waters appurtenant to its reservation . . . .” The letter goes on to state

that “[t]he Osage Reservation was confirmed by Congress in the Act of June 5, 1872, 17 Stat.

228" and that the “boundaries of the reservation are essentially coextensive with the

boundaries of Osage County.” Essentially, the letter provides notice to the state that it has no

authority to adjudicate issues concerning water rights in the Osage Reservation since federal

law preempts state law in this area.10 A copy of the February 15, 1994, letter is attached

hereto as Exhibit “7.”

The Commissioners cannot cite to any legal authority that Congress has affirmatively

disestablished the Osage Reservation boundaries. On the contrary, there are numerous

instances evidencing the federal government’s (and the State of Oklahoma’s) affirmation that

the Osage Reservation continues to exist. The Osage Reservation was established for the

Nation in 1872, and the reservation continues to be under federal supervision, see supra , in

the area of water rights protection, as trustee over the entire Osage Mineral Estate (entire

subsurface of the Osage Reservation), and in the area of Indian gaming regulation. Thus, the

Nation is able to state a claim upon which relief can be granted as to the status of the Osage

Reservation.

10 This letter was one of the documents relied upon by the NIGC in its July 28, 2005, opinion letter finding that the Nation’s reservation continues to exist. 22

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C. The Nation Does State a Claim Upon Which Relief Can be Granted Under Federal Law That Tribal Members Who Both Reside and Earn Income Within Indian Country Are Exempt From State Income Taxes.

The Nation’s claim that tribal members who both reside and earn income within the

Nation’s Indian country are exempt from having to pay state income tax is based on well-

settled federal law. See, e.g., Oklahoma Tax Commission v. Chickasaw Nation , 515 U.S. 450

(1995); Oklahoma Tax Commission v. Sac and Fox Nation , 508 U.S. 114 (1993);

McClanahan v. State Tax Commission of Arizona , 411 U.S. 164 (1973). Supreme Court

cases hold that this rule applies in Indian country, as that term is defined in 18 U.S.C. § 1151,

without limiting the rule to only trust and restricted lands. See, e.g., Chickasaw Nation , 515

U.S. at 453; Sac and Fox Nation , 508 U.S. at 123 (recognizing that Indian country includes,

among other things, “formal” and “informal” reservations). The Supreme Court specifically

has held that the income tax is “unlawful as applied to reservation Indians with income

derived wholly from reservation sources” without limiting the rule to only income earned

from working for a tribe. McClanahan , 411 U.S. at 165.

The Commissioners’ argument that the Nation cannot state a claim under this rule is

especially disingenuous considering the Commissioners’ own regulations provide that tribal

members are exempt from Oklahoma income tax when those members reside and earn

income from sources (not limited to tribal employment) within Indian country, as defined

under 18 U.S.C. § 1151. See OAC 710:50-15-2 (attached hereto as Exhibit “8”). Further,

this rule has been applied by written decision to actual taxpayer protests filed with the

Commissioners by Oklahoma taxpayers who attempted to claim the exemption. See, e.g.,

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Oklahoma Tax Commission Decision, 2006-05-04-23, N-01-025 (attached hereto as Exhibit

“9”). 11

The Commissioners’ argument that the State’s interest in raising revenue should be

taken into consideration 12 is not appropriate and is contrary to well-established law cited

herein. See Chickasaw Nation , 515 U.S. at 458 (“when a State attempts to levy a tax directly

on [tribal] members inside Indian country, we have employed, instead of a balancing inquiry,

‘a more categorical approach: ‘[A]bsent cession of jurisdiction or other federal statutes

permitting it,’ we have held, a State is without power to tax reservation lands and reservation

Indians.”). Consequently, the Nation has sufficiently stated a claim upon which relief can be

granted under this long-standing principle of federal law. The Commissioners’ motion to

dismiss should be denied.

CONCLUSION

WHEREFORE, Plaintiff Osage Nation respectfully submits this objection and

response brief in opposition to the motion and brief of Defendants seeking dismissal. For the

reasons provided herein, the Nation requests the Court deny the Defendants motion in all

respects.

Dated this 30th day of June, 2008.

11 The Nation provides this written ruling, not in agreement with any legal conclusions provided in the ruling, but, rather, to show the Commissioners’ use of the definition of Indian country under Section 1151. 12 Notably, by the Act of April 25, 1940, 54 Stat. 168, Congress has provided a mechanism whereby the State is able to receive revenue for governmental purposes through a gross production tax levied and collected on oil and gas production from the Osage Mineral estate, the subsurface estate of the entire Osage Reservation. This tax also goes to fund services in Osage County, negating any argument by the Commissioners that Osage tribal members’ income tax exemption is a detriment to county government services. 24

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Respectfully submitted,

/s/ O. Joseph Williams ______Gary S. Pitchlynn, OBA #7180 O. Joseph Williams, OBA # 19256 PITCHLYNN & WILLIAMS , PLLC 124 East Main Street P.O. Box 427 Norman, Oklahoma 73070 Telephone: (405) 360-9600 Facsimile: (405) 447-4219 Email: [email protected] [email protected]

ATTORNEYS FOR PLAINTIFF

CERTIFICATE OF SERVICE

I hereby certify that on this 30 th day of June, 2008, a true and complete copy of the within and foregoing RESPONSE BRIEF IN SUPPORT OF PLAINTIFF OSAGE NATION IN OPPOSITION TO MOTION TO DISMISS AND OPENING BRIEF IN SUPPORT OF MOTION TO DISMISS OF DEFENDANTS was electronically transmitted to the Clerk of Court using the ECF system for filing and transmittal of a Notice of Electronic Filing to the following ECF registrants:

Douglas B. Allen Lynn H. Slade Guy Hurst William C. Scott OKLAHOMA TAX COMMISSION Modrall, Sperling, Roehl, Harris & Sisk, P.A. 120 N. Robinson Avenue, Suite 2000W 500 Fourth Street, NW, Suite 1000 Oklahoma City, Oklahoma 73102 Albuquerque, NM 87102 Attorneys for Defendants Attorneys for Defendants

/s/ O. Joseph Williams ______O. JOSEPH WILLIAMS