a A 35 be more in line with health facility funds already appropriated for Guam and authorized to be spent in the Virgin Islands. Public Law 95-134 authorized $25,000,000, which has been appropriated for tho purchase of a modern 250-bed hospital facility to service 100,000 people on Guam. Public Law 95-348 authorized about $52,000,000 for two 250-bed hospitals on St. Croix and St. Thomns, a small facility on St. John, and related outpatient facilities and clinics to service a 1983 population of 161,000 in the Virgin Islands. Additionally a 90-bed hospital in the Northern Marianas would provide 5.6 beds per thousand people; the HEWceiling standard recommends + beds per thousand. Considering these statistics, the pro- posed facilities appear to be larver than necessary for the population of the Northern Marianas and the projected costs for the facilities appearto be excessive. Furthermore, the ability of the government of the Northern Marianas to staff and maintain elaborate facilities on acost-effective basis is uncertain. . * Wedo not doubt that upgraded facilities are necessary. At the pres-— ent time, however, we cannot offer a firm figure to substitute for the one in the bill. Ps The Administration, therefore, cannot support the authorization | containedin section 202. The Department of the Interior will under- take, in cooperation with the Department of Health, Education, and Welfare, to report to.the Congress by June 1, 1980, as to the Northern ' Marianas hospital needs and their costs. We would not objectto such an endeavor’s beingstatutorily required. - SECTIONS 203, 301, 402, AND 502, zz Sections 203, 301, 402, and 502 would have the Secretary of the Treasury administer and enforce, to varying degrees, income tax and customs laws in the territories of the Northern Mariana Islands, Guam, the Virgin Islands, and American Samoa, We understand that the sponsors of this concept believe that additional revenue would accrue to the territorial governments under administration and collection of taxes and duties by the Internal Revenue Service. The Department of the Interior defers on this issue to the Department of Treasury, which will present a detailed report on these sections for the Administration. co Westress, however, that the issues raised by these sections are complex. Customs laws, which may be Federal orlocal, may be applicable In one territory but not another. Also, the application of United States income tax laws differs from territory to territory. For example, the mirror theory of taxation applies in the Virgin Islands, but not in the other territories; United States income tax laws apply in Samoa, not by virtue of Federal enactment but by virtue of territorial incorporation of Federal law. The collection of taxes has been traditionally the function of local territorial governments. The Governors of Guam and the Virgin Tslancs believe that the Federal administration of taxes would intrude into territorial prerogatives and therefore oppose mandatory Federal collection of territorial taxes. We agree that the proposal now contained in ILR. 3756 raises a significant question as to whether it reverses the long-standing United States Government policy of foster- cs ing greater local self-government for the territories.