for the Virgin Islands to build an armory on approximately 10 acres. We believe that section 403 would result in a “second” transfer of the 230 acres in questioi from the United States to the Virgin Islands but would not relieve the Virgin Islands of its responsibi‘.ities under the mortgage given at the time of the first transfer. In our report on H.R. 3756 the Administration recommends (1) that the substance of Section 403 be returned to the form in which it originally appeared in Section 404 of 4.R. 3756 as introduced, and (2) that the House Committee amendment be stricken and a new section be added to H.R. 3756, at the end of Title IV allowing the General Services Administration to release from the mortgage given by the Virgin Islands approximately 10 acres of land for the construction of an armory for St. Croix. We believe that such an amendment would accomplish the purpose of facilitating armory construction. On the following provisions we defer to other agencies: Section 203, 301, 402, and 502 would have the Secretary of the Treasury administer and enforce, to a varying ~ extent, income tax and customs laws in the territories of the Northern Mariana Islands, Guam, the Virgin Islands, and American Samoa. The Department of the Interior defers on this issue to the Department of the Treasury. We stress, however, that the issues raised by these sections are complex. Customs laws, which may be Federal or local, may be applicable to one territory but not another. Also, the application of United States income tax laws differs from territory to territory. The collection of taxes has been traditionally the function of local territorial governments. The Governors of Guam, the Virgin Islands, and the Northern Mariana Islands 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 contained in H.R. 3756 raises a significant question as to whether it reverses the long standing United States Government policy of fostering greater local self-government for the Territories. The Interagency Task Force reviewing territcrial policy is addressing various issues, including tax adminstration considered in these sections. Presidential decisions will be forthcoming later this year. Among the options to be considered by the Administration will be federal training and technical assistance for territorial tax collection agencies.