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Document 40 of 92.

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APRIL 20, 1999, TUESDAY

SECTION: IN THE NEWS

LENGTH: 5369 words

HEADLINE: PREPARED TESTIMONY OF
JUDITH BITTNER
PRESIDENT
NATIONAL CONFERENCE OF STATE HISTORIC PRESERVATION OFFICERS
BEFORE THE SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES
SUBJECT - S. 25, CONSERVATION AND REINVESTMENT ACT OF 1999
AND S. 446, RESOURCES 2000 ACT OF 1999
AND S. 532, PUBLIC LAND AND REINVESTMENT ACT OF 1999
AND THE ADMINISTRATION'S LANDS LEGACY INITIATIVE

BODY:

The National Conference of State Historic Preservation Officers appreciates the opportunity to testify in support of the dedication of offshore oil lease revenues to their intended purposes: natural conservation and recreation and historic preservation. For half a decade the National Conference has participated in the broad-based coalition working to secure the intent of the framers: to dedicate a portion of the income to the United States earned from the depletion of one non-renewable resource-oil-to the conservation and enhancement of historic and natural resources. Our request is to include the conversion of the Historic Preservation Fund (16 U.S.C. 470h) into a permanent, annual appropriation similar to the proposed treatment for the Land and Water Conservation Fund. I. SUPPORT FOR PERMANENT HISTORIC PRESERVATION FUND APPROPRIATION
The National Conference of State Historic Preservation Officers endorses and for two decades has endorsed the visionary concept of the Land and Water Conservation Fund and the Historic Preservation Fund: that a portion of the proceeds from Outer Continental Shelf mineral leasing revenues received into the Nation's treasury from the depletion of a nonrenewable natural resource--oil--should be dedicated to the conservation and enhancement of natural, recreational and historic resources. These OCS revenues should result in the creation of a permanent legacy that benefits all Americans in terms of enriched parks, recreation, open space, and human habitat: the historic neighborhoods and Main Streets where people live and work.
Since the 1980's, the original intent of the framers has been subverted. OCS revenues, while credited to the Land and Water and Historic Preservation accounts, were spent for unintended purposes. The time has come to fulfill the promise made to the American people. S. 25, S. 446, and S. 532 all honor that commitment. (S. 25 and S. 532 addition of language to include a permanent appropriation for the Historic Preservation Fund.)
The Administration's Lands Legacy Initiative a one-year increase in the fiscal year 2000 budget focuses on the natural environment. The Department of the Interior's initial proposal had included a $150 million withdrawal from the Historic Preservation Fund. The final budget eliminated any increases for the historic preservation program. (The budget proposes level funding States and tribes.) The National Conference believes this is a shortsighted decision. A healthy natural environment depends on a healthy habitat for humans. Historic preservation provides the philosophy and methodology to recycle neighborhoods and business districts into attractive places to live and work.
The Land and Water and Historic Preservation Funds give States and localities a pivotal role in heritage conservation. Because of competition for federal moneys, the requirement of an annual appropriation, and administrations who prioritized federal spending and federal land acquisition instead of State partnerships, the original intention of the Funds was abandoned. At the same time the growth of the population and the concomitant disappearance of open space has spurred an increased demand for recreation, conservation areas and historic preservation tools.
As the millennium approaches, America requires a new vision for our Land. Our legacy to the 21st century can be a better place, a place that says we of the 20th century were able stewards of our inheritance, not wastrels of precious gifts. Through the realistic funding proposed in these three bills, an opportunity exists to benefit American citizens today and future descendants.
The new vision embodied in these bills must see from "sea to shining sea." The OCS revenues in our national treasury benefit the entire country, not just the land owned by the federal government. Parks, recreation, historic preservation needs exist in every zip code. Resource needs on federal lands (where few Americans live) hold no more priority for the Nation's revenues than needs in small towns or cities where people do live. Our conservation investments from the federal treasury must be democratically expended to benefit land, wildlife, nature and human beings.
Historic preservation is a part of this "new vision" and must be included in the final Committee bill because...
1. The Nation's resources-whether natural or historic-exist off federal lands as well as on the federal estate
2. To save natural environment, a positive treatment of the human habitat is a requirement. Historic preservation/s recycling.
3. Historic preservation is essential to the success of any efforts to combat sprawl. Historic preservation makes existing areas attractive alternatives to the suburbs-with in-place infrastructure-as places to live and work.
4. Historic preservation activity directly enhances economic development through construction expenditures for rehabilitation. Historic neighborhoods draw visitors and cultural tourists stay longer and spend more. Improved neighborhoods and downtowns contribute to safer, high quality communities.
II BENEFITS OF THE NATIONAL HISTORIC PRESERVATION PROGRAM
Background of the Act. In the 1960s two well-intentioned federal programs, urban renewal and interstate highways, produced devastating unintended effects on many American communities. To help mitigate those effects, Congress passed the National Historic Preservation Act of 1966, the first major piece of national environmental legislation. The Act made the States the front-line guardians of the nation's historic resources outside national parks. Over more than three decades, the States have faithfully carried out America's preservation program, encouraging private preservation initiatives, stimulating investment, creating jobs, and strengthening communities.
The Act and Its Cornerstone: the National Register of Historic Places. Congress called upon each State to establish a Historic Preservation Office to identify the historic buildings, structures, sites and districts that, in the eyes of local experts, typified the State's contribu- tion to the nation's architectural and archaeological heritage. Congress also provided federal funds for the work (on a matching basis). The composite list kept by the National Park Service is called the National Register of Historic Places. The Keeper of the Register is a Park Service official who assures that standards are maintained nationwide. Contrary to persistent rumor, placement on the National Register in no way encumbers private property rights. Keeping Federal Agencies Honest. Congress required in Section 106 of the 1966 Act that Federal agencies undertaking actions in the States and territories should respect properties on or eligible for the National Register.

In planning projects, Federal agencies are required to consult with State Historic Preservation Officers on the significance of the resources in the project area and how best to protect them. This requirement provides some protection for owners of significant historic properties flora Federal encroachment, and also gives the States a say in how Federal projects are structured. New regulations to be issued this year give States Ired tribes more authority than ever in the consultative process.
Historic Rehabilitation Tax Credit. To encourage rehabilitation of commercial buildings on the National Register, Congress in 1976 enacted a rehabilitation tax incentive in the Internal Revenue Code. That provision entitles owners of income-producing properties on the National Register to a credit of 20 percent of rehabilitation costs if the work is done in accordance with the Secretary of the Interior's Standards for Rehabilitation of Historic Buildings. In the past year alone, the provision has leveraged $2 billion in private investment in National Register properties and has created 42,394 jobs. Moreover, many States have enacted complementary State tax credits to leverage the economic impact of the federal credit still further. The program has been a net plus for the U.S. Treasury.
Certified Local Governments (CLGs). In 1980 Congress amended the National Historic Preservation Act to require that each State pass through 10 percent of its annual allocation to local governments certified as having outstanding local preservation programs. At a minimum, each CLG establishes its own volunteer commission and enacts a preservation ordinance tailored to local needs. A CLG can go so far as to assume from the State Office responsibility for National Register nominations and Section 106 consultation for its jurisdiction. Since 1980 more than 1,500 local governments have chosen to participate, more for recognition than for the modest pass-through grant money.
In Sum: An Economic Development Program That Strengthens Communities -- and Morel That's what America is already getting for less than the cost of a single fighter plane. Using the National Register as a tool, State Offices and CLGs help willing property-owners win recognition for historic properties, secure their protection from federal encroachment, and obtain tax credits to rehabilitate and reuse them in income-producing ways. States and localities leverage the federal program with added incentives to increase public benefit. Each $1 from the Historic Preservation Fund to the States generates an investment of $30 by State and local governments and the private sector. States and localities know that:
- every million dollars spent on rehabilitating historic sites creates 29.8 new jobs (15.6 in construction and 14.2 in the professions and ancillary fields) and generates $779,800 in household income;
- that same million dollars creates 3.4 more jobs and adds $53,000 more to household incomes than a million dollars spent on new construction;
- many companies, especially those employing highly paid knowledge workers, prefer to locate in communities with historic character and interest;
- preservation pays dividends to homeowners, since property values rise faster in historic districts than elsewhere; and
- historic attractions form the basis of America's burgeoning heritage tourism industry.
And who can put a dollar value on these less tangible, but perhaps more important, benefits of historic preservation?
- community pride;
- the sense of belonging and citizenship;
- the feeling of connection with the nation's past;
- the educational value that comes from bringing history to life for young people; and the aesthetic value that comes from preserving our country's architectural heritage.9
Funding the Nation's Non-Park Historic Preservation Program: The Historic Preservation Fund (HPF) is a line item in the Department of the Interior budget appropriated annually from offshore oil-drilling revenues to carry out the Act. Grants are made annually from the HPF to the 57 States and territories, to Indian tribes, and to certain important classes of resources and projects. The respective States' shares are apportioned by formula. Every State at least matches the federal contribution, and many States overmatch.
Historical Perspective on States' Funding. Appropriations from the Fund have never reached their authorized level of $150 million. In fiscal year 1981, the States' funding was cut from $45 million to $19 million. The States' appropriation for FY 1999 stands at $32 million, nearly 25 percent/ess in purchasing power than appropriations immediately after the 58% Reagan cut. Despite the increasing challenges the State offices face, the Clinton administration has consistently proposed level funding for States and territories, which translates into real cuts. Declining State Share within HPF Appropriations. Moreover, the States' share of the HPF appropriation has declined. Since the 1992 amendments to the Act, Indian tribes have received grants for their preservation programs, and Congress has made special awards to politically appealing classes of resources --lighthouses and historically black colleges and universities-- as well as individual buildings. As a result, the nation's basic program to help communities and property owners -- the program run by the State offices -- has been starved.
Today's Challenge. Today as in the 1960s, America's communities are again struggling in the face of enormous challenges to maintain identity, cohesion, continuity, and a sense of place. The very existence of communities -both urban and rural --is threatened by these powerful social, economic, and demographic challenges. States need more tools to meet these new challenges. Whether dealing with issues of growth or decline, America's communities more than ever need strong State historic preservation offices to help them maintain their unique character and build upon it for the future.
What About the Built Environment? There is much public debate in the new Congress about how to protect and preserve the environment in the face of economic and population growth. Both political parties have proposed massive new spending for this purpose. Notably absent from the debate, however, is a recognition that the built environment is a critical component of the environment as a whole. Unless our policy encourages investment in revitalizing and reusing significant buildings, districts, downtowns and neighborhoods, we cannot hope to restore our communities to health and preserve America's priceless natural heritage. Our communities must be strengthened as centers of economic, social and educational vitality --in short, as growth centers.
A Responsible Legislative Agenda for Preservation of America's Legacy. Neglect of the States' portion of the HPF does not provide the kind of federal leadership and support envisioned in the I966 Act, and it erodes the federal-State partnership that has been so successful for three decades despite never having been funded to the authorized level.
Therefore, the National Conference looks to Congress to give the State Offices the necessary tools. We call upon Congress to enact the language of Title III in S. 446 to create a permanent, annual withdrawal of $150 million from the Historic Preservation Fund.
Public Benefits:
Vigorous registration of historic properties and use of tax credits will revitalize our older downtowns, neighborhoods, and districts and help restore viable communities.
Enacting the Historic Homeowner Assistance Act will extend the benefits of federal tax credits to residential property owners, revitalize older neighborhoods and districts across the nation, and dramatically boost the construction industry.
Reinvigorated effort to survey areas as yet inadequately surveyed can target important resources for preservation and reuse as assets to communities.
Restoring the grants program will enable direction of funds to projects using historic resources as catalysts of community revitalization.
Making available more than token funds for the Certified Local Government program will enable communities to preserve what is critical to their identities, pride, economic health and sense of place.

Encouraging education with historic places in our schools and communities will help our children learn volumes about citizenship and.the shaping of our country.
Boosting heritage tourism, based on preservation and interpretation of historic buildings, districts, battlefields and archaeological sites, will provide much needed jobs and revenues for communities.
The Tools to Do the Job. As America is poised for the new millennium, we should remember that for a third of a century the States have been saving America's treasures and producing results that benefit citizens, communities, the States and the nation. The combination of federal leadership and State execution has worked well. Today, with America's communities threatened, it is time for Congress to reaffirm the partnership that has worked so well. It is time to give the States the tools to do the job the Act's visionary framers intended.
III. BACKGROUND ON THE NATIONAL CONFERENCE OF STATE HISTORIC PRESERVATION OFFICERS
The National Conference of State Historic Preservation Officers is the association of the gubernatorially appointed officials in State government who carry out the Nation's historic preservation program under the National Historic Preservation Act for the Secretary of the Interior and the Advisory Council on Historic Preservation. A nonprofit organization incorporated in 1976 in the District of Columbia, the National Conference facilitates communication among the State Historic Preservation Officers from the 57 States, territories and the District of Columbia and represents State historic preservation interests at the national level with the federal and private sectors.
IV. VIEWS OF THE NATIONAL CONFERENCE OF STATE HISTORIC PRESERVATION OFFICERS ON EACH BILL AND INITIATIVE
A. S. 25-CONSERVATION AND REINVESTMENT ACT OF 1999
1. Principal recommendation: add the permanent, annual, $150 million withdrawal from the Historic Preservation Fund to S. 25 The National Conference of State Historic Preservation Officers urges the Committee to include a title in the Conservation and Reinvestment Act that converts the Historic Preservation Fund (Section 108 National Historic Preservation Act, 16 U.S. C. 470) to an annual, $150 million, permanent appropriation. The text of Title III of S. 446 accomplishes this objective.
The objectives of the Conservation and Reinvestment Act for the natural and recreational environments are enhanced by the inclusion of the historic, built environment. On the most practical level, improving the existing places where people live, shop and work provides alternatives for the development of open space and the infringement of wild life habitats. Historic preservation is the ultimate recycling process, re-using buildings for modem purposes. The more existing towns arid cities attract people the less pressure on developing open space.
2. Views on other Sections of S. 25
In the proposed new Section 701, Findings, beginning on line 16, page 2, the bill should include a new paragraph on the potential adverse environmental impacts from offshore oil drilling on historic resources, particularly prehistoric archeological sites. In Title I, the bill should add a subparagraph (7) to the new Section 704 Uses of Funds of the Outer Continental Shelf Lands Act beginning on line 11 page 17 that authorizes funding for enhancement of historic properties listed on the National Register. Historic sites, like air quality, wetlands, wildlife, are part of the environment on the fragile shorelines of coastal states and merit eligibility for impact assistance funds.
In Title II, Land and Water Conservation Fund, Section 203(d) beginning on line 23 page 25, limits grants administration charges to 2% of the recipient's allocation. The Committee should examine this provision closely. Two per cent is totally unrealistic for the Historic Preservation Fund administrative requirements of the National Park Service. For the past decade the actual cost of administering National Park Service grants by States is 11% of the allocation. It is possible that with increasing allocations the actually administrative cost percentage may decrease as the National Park Service requires the same degree of oversight for a Historic Preservation Fund subgrant of $5,000 as it does for a subgrant of $500,000.
The National Conference is interested in the concept on line 15 page 26, Section 203(f) that treats all tribes and Alaska Native Village Corporations as one "state" for the purposes of allocation of grants. This idea merits further investigation for the allocation of Historic Preservation Fund appropriations among Tribal Historic Preservation Offices.
B. S 446--RESOURCES 2000 ACT
1. Principal recommendation: adopt the language of Title III: permanent, annual $150 million appropriation from the Historic Preservation Fund
The National Conference heartily endorses Title III on page 29 of S. 446 which converts the Historic Preservation Fund to a permanent appropriation through an amendment of Section 108 of the National Historic Preservation Act (16 U.S. C. 470h).
We encourage the Committee to include this language in whatever bill is reported out of Committee.
It is our understanding that the effect of Title Ill is to make Section 108 of the National Historic Preservation Act read as follows.
SECTION 108
(a) To carry out the provisions of this Act, there is hereby established the Historic Preservation Fund (hereafter referred to as the "fund") in the Treasury of the United States. Subject to section 5 of the Resources 2000 Act, there shall be deposited into such fund $150,000,000 for each fiscal year after fiscal year 1998' from revenues due and payable to the United States as qualified Outer Continental Shelf revenues (as the term is defined in section 4 of that Act, and/or under the Act of June 4, 1920 (41 State. 813) as amended (30 U.S.C. 191), not withstanding any provision of law that such proceeds shall be credited to miscellaneous receipts of the Treasury. Such monies shall be used only to carry out the purposes of this Act.
(b) (1) Of amounts in the fund, up to $150,000,000 shall be available each fiscal year after September 30, 1999, for obligation or expenditure without further appropriation to carry out the purposes of this Act, and shall remain available until expended.
(2) at least 1/2 of the funds obligated or expended shall be used in accordance with this Act for preservation projects on historic properties. In making such funds available, the Secretary give priority to the preservation of endangered historic properties.
(c) The Secretary of the Treasury shall invest moneys in the fund that are excess to expenditures in public debt securities with maturities suitable to the needs of the fund, as determined by the Secretary of the Treasury, and bearing interest at rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturity. Interest earned on such investments shall be deposited into the fund.
The National Conference understands that the change of verb from "covered" to "deposited" will ensure that the offshore oil lease revenues placed in the Historic Preservation Fund are actually available for allocation among the States and tribes. The National Conference is concerned about the language of the proposed Section 108(b)(2) which currently requires one half of the Historic Preservation Fund annual allocation go to "projects". It is essential that the definition of "projects" include capital and non- capital, or construction and non-construction, activities. Future resource needs may exist beyond restoration activities. One current national priority is the digitizing of State inventory information into geographic information systems. This requires a substantial initial investment to encode site-specific information. Once completed, however, a geographic information system yields substantial rewards. On the most practical level, it reduces the comment time in the Section 106 process dramatically thus reducing environmental review costs on federal agencies and applicants.

Further, the capability of State Historic Preservation Offices lags way behind the need of the private sector for expertise, technical assistance and advice. Every private preservation organization, led by the National Trust for Historic Preservation, agrees that the State Historic Preservation Offices are the principal point of contact from the private sector seeking historic preservation advice and seeking guidance on the national preservation program.
The National Conference supports the concept in the new Section 108 (c) on page 30 which deposits Historic Preservation Funds excess to expenditures in public debt securities. This is a prudent step which will help create a self-sufficient Historic Preservation Fund which in the future may operate on the interest, rather than on offshore oil lease revenues.
The National Conference is concerned about protecting the intent of the Historic Preservation Fund from raids from other than intended users. The current language in Section 101(e)(3)(A) limits Secretarial grants to 10% of the annual allocation. The appropriaters have continually ignored federal law and awarded increasing amounts from the currently limited Historic Preservation Fund appropriations. In fiscal year 1999, only 40%, not the statutory 90%, of the Historic Preservation Fund went to the intended recipients:
States (and through States to local governments) and Indian tribes.
2. Views on other sections of S. 446
Section 3 (a)(7) on page 5 discusses suburban sprawl as threat to open space. A sentence should be added that indicates that historic preservation provides with an alternative to sprawl for residential and retail uses.
In Section 3(b) on page 7, a new paragraph (7) should be added indicating a purpose of the Act is the protection and enhancement of historic properties.
The National Conference has questions about phraseology concerning the Outer Continental Shelf revenues. In Section 4(4) page 8, the term "qualified outer continental shelf deposits" means to restrict the source of funds to those areas currently under lease. "Qualified outer continental shelf deposits" is intended to signal that no new drilling shall occur. The National Conference is interested in maintaining the annual deposits of $150 million in to the Historic Preservation Fund. We understand that the use of this term will not have the effect of reducing the amount of the annual deposit for the foreseeable future.
The National Conference does heartily support the concept of investing unneeded portions of the annual $150 million deposit in interest bearing government securities. This will, over time, have the benefit of "growing" the Historic Preservation Fund working toward the possibility of a self-generating fund for historic preservation where interest earned funds annual outlays.
Section 6 on page 11, line 11, limits administrative expenses to 2% of the "activity." As mentioned above, the National Park Service rules for administering Historic Preservation Fund allocations cost states 11%.1 When this bill increases the Historic Preservation Fund allocations to each State, it is possible that the cost per grant dollar of following the National Park Service's rules may decrease. However, the National Conference has concerns that the administrative limit is unrealistic.
In Title IV, on farmland, ranch land, Open space and forest land protection the National Conference has two comments. First, the National Conference believes it is more efficient to work through the States for acquisition of land rather than through federal agencies. Second, the protection of acquired lands is dependent to some degree on the designated holder of the easement. (Section 404, line 12, page 33) Easements held by private, nonprofit organizations can be condemned by local or State governments and the original purpose subverted. Further, private nonprofits themselves can counter the purpose of the easement. Permanent protection of open space through easements is enhanced through a check and balance system with more than one holder of the easement.
C. S 532-PUBLIC LAND AND RECREATION INVESTMENT ACT OF 1999
1. Principal recommendation: add the permanent, annual, $150 million withdrawal from the Historic Preservation Fund to S. 532.
2. Views on other sections of S. 532: The National Conference supports the language in Sec. 2 paragraphs (3),(8) and (9), pages 2 to 4. This text provides an apt analysis of the diversion of Outer Continental Shelf revenues from their intended purposes for both the Land and Water Conservation Fund and the Historic Preservation Fund.
Section 3(c)(3)(C), conforming amendments, on page 13, amends the National Historic Preservation Act reference to coordination of recreation planning with the mandated historic preservation plan. The National Conference recommends that this subparagraph be amended as follows: (C) Section 102(a)(2) of the National Historic Preservation Act (16 U.S. C. 470(b)(2)) is amended by striking all that follows after the words "approved by the Secretary".
The National Park Service has re-engineered the requirements for statewide historic preservation plans. Rather than mandating a "one size fits all" plan for every State, each jurisdiction defines the scope of its plan within a statewide framework that reflects all relevant governmental and private sector components. In place for a half decade, this re- engineered system has worked well, certainly better than the previous, prescriptive planning system.
The National Conference regrets that Senator Feinstein, while reviewing the Act is such detail to change planning requirements, did not include the conversion of the Historic Preservation Fund into a permanent appropriation.
D. ADMINISTRATION'S LANDS LEGACY INITIATIVE
The National Conference was extremely disappointed that the Administration had dropped the $150 million Historic Preservation Fund withdrawal from the Lands Legacy Initiative. We understand that the Office of the President eliminated the historic preservation initiative, included by the Department of the Interior, because of cost. We believe this decision was short-sighted for several reasons.
1. Historic preservation provides the techniques and philosophy to enhance existing communities, to improve the "human habitat." Human beings are part of the environment too. Wilderness, park land, recreation sites cannot exist unless people have a place to live and work.
2. Historic preservation is a good investment that continues to pay interest over the years. The Historic Preservation Fund is not a land acquisition program involving a perpetual federal financial obligation for maintenance and management. Projects restored through the Historic Preservation Fund carry the caveat that the current and future owners must maintain the property in its restored state. Historic Preservation Fund-assisted projects are available and accessible to the public. The Historic Preservation Fund requires a match for any activity.
The Historic Preservation Fund plants seeds which grow and continue to generate benefits. The economic successes of the Garden District in New Orleans, Annapolis, LoDo in Denver, or Takoma Park in Maryland are examples. It is hard to believe decades later that the initial push for preservation of these places, often the National Register nomination, was met skeptically by the general public.
3. Historic preservation is the original livability agenda: using architecture and history to attract individuals to invest in existing neighborhoods and retail districts where the necessary infrastructure is in place. 4. The Lands Legacy Initiative and much of the Clinton Administration fiscal year 2000 budget request reflect a "top down," "Washington knows best" approach. We believe this concept works when the federal government is going to acquire the land and assume the perpetual care and management responsibilities.
We believe it is more appropriate to follow the Clinton Administration's reinventing government approach. Effective decisions are made closest to the affected resources, by the people not for the people. The existing national historic preservation program under the National Historic Preservation Act is "reinvented." Preservation decisions are made by the property owners with the option of help and tools from States and local governments.
IV. CONCLUSION
The National Conference of State Historic Preservation Officers extends its thanks to Chairman Murkowski for the opportunity to testify. We urge the Committee and the Senate to enact a permanent, annual $150 million permanent Historic Preservation Fund appropriation.
FOOTNOTES:
1 Source National Park Service, Historic Preservation Services, Slate Products and Sources, Historic Preservation Fund, fiscal year 1998 and records for preceding ten years.
END

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