Cite as: 518 U. S. 839 (1996)
Rehnquist, C. J., dissenting
Entrapment, 477 U. S. 41 (1986), which relied on Merrion v. Jicarilla Apache Tribe, 455 U. S. 130, 148 (1982), and Merrion, in turn, quoted the much earlier case of St. Louis v. United Railways Co., 210 U. S. 266 (1908). St. Louis involved an agreement by the city to grant street railway companies use and occupancy of the streets, in exchange for spec-ified consideration which included an annual license fee of $25 for each car used. Id., at 272. When the city later passed an ordinance amending the license tax and imposing an additional tax based on the number of passengers riding each car, the railway companies challenged that amendment as a violation of the Contracts Clause. The Court there said that such a governmental power to tax resides in the city "unless this right has been specifically surrendered in terms which admit of no other reasonable interpretation." Id., at 280.
Merrion, supra, was similar, but involved the sovereignty of an Indian Tribe. The Tribe had allowed oil companies to extract oil and natural gas deposits on the reservation land in exchange for the usual cash bonus, royalties, and rents to the Tribe. The Court found that, in so contracting, the Tribe had not surrendered its power to impose subsequently a severance tax on that production. Merrion explains that "[w]ithout regard to its source[—be it federal, state, local government, or Indian—]sovereign power, even when unexercised, is an enduring presence that governs all contracts subject to the sovereign's jurisdiction, and will remain intact unless surrendered in unmistakable terms." 455 U. S., at 148.
Next, Bowen, supra, addressed Congress' repeal of a law that had once allowed States which contracted to bring their employees into the Federal Social Security System, to terminate that agreement and their participation upon due notice. Bowen, therefore, considered not the imposition of a tax as St. Louis and Merrion, but an amendment to a statutory provision that existed as a background rule when and under
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