How the Historic Preservation Fund Divides Its Money Among the States: the 2023 Formula

The Historic Preservation Fund (HPF) was set up in 1977 to carry out the National Historic Preservation Act of 1966. Each year, through 2023, $150 million from offshore oil and gas lease revenues — not tax dollars — is deposited in it, and Congress appropriates money from it annually. At first it funded only the states; local governments were added in the 1980s, tribal nations in the 1990s, and later competitive grant programs.

States receive their share through an apportionment formula that reflects need as the Secretary of the Interior defines it. In July 2022 the National Park Service revised the formula, which had been unchanged since 2002.

Who gets it

The annual formula grants go to 59 State Historic Preservation Offices (SHPOs): the 50 states, the District of Columbia, the five U.S. territories and the three Freely Associated States (the Federated States of Micronesia, the Marshall Islands and Palau).

States must pass at least 10% of their grant to Certified Local Governments — communities that have committed to historic preservation in partnership with the Park Service and their SHPO, gaining technical help and grants in return for acting as their community's preservation experts. There are more than 2,080 of them. Once the total for states exceeds $65 million, the law requires half of the excess to go to them as well.

The new formula

Congress directed that the revised formula take effect in fiscal year 2023, in the explanatory statement to the Consolidated Appropriations Act of 2023. It will stay in use until the next census or the next revision.

The Freely Associated States lack comparable census data, so they stay outside the tiers and keep the same percentage of the total they received in FY21.

The page dates fiscal year 2023 from October 1, 2023; the federal fiscal year 2023 began on October 1, 2022. Slides the Park Service presented to the SHPOs on October 27, 2022, still describe the formula as starting in fiscal 2024.

Switching to current census data can raise or lower a state's award.

Why a state's money can fall as it grows

Funds follow each state's share of the national total, not its own growth. Between 2000 and 2020 the nation's area grew 0.38%, its population 17.31% and its count of older homes 104.87%. Only 6 states and territories lost population and only 4 territories lost homes — but 36 grew in population more slowly than the nation, and 31 grew more slowly in homes, so their shares shrank.

How the review was done

The Park Service director administers the fund for the Secretary of the Interior. The formula had not been reviewed since 2002; after the 2010 census the detailed data it needed were missing. From 2020 to 2022 the Park Service's Cultural Resources, Partnerships and Science directorate reviewed it, obtained the detailed census data and drew up recommendations, which the director approved. Its principles: the formula should define need without subjectivity, be simple to explain, fair to every state and purely numerical; give every state a base large enough to run a program meeting federal minimums; change gradually, predictably and after consultation; minimize disruption; consider the effect on Certified Local Governments; and plan for the $65 million threshold.

• Surveys. 87% of SHPOs responded, most satisfied with the current data and wanting regular review; Certified Local Governments across the country supported the process and asked for an easier path to their grants through the state offices.
• Partners. The National Conference of State Historic Preservation Offices and the National Alliance of Preservation Commissions largely agreed with the Park Service's analysis. It did not adopt their suggestions to delay the change until state funding reached $60 million, or to add the number of municipalities and tribal consultations to Tier 2.
• Notice. Every governor and SHPO was told in writing, and the changes are attached to all fiscal 2024 state grant agreements, with training from Park Service staff.
• More time to spend. From fiscal 2022, SHPOs have three years instead of two to spend each year's grant.

Is it enough?

No. The $150 million authorized for the fund was judged in 1979 to be the national need for states alone. Even fully funded, no formula could now cover every state and local need.

What the fund pays for

The Park Service's State, Tribal, Local, Plans and Grants Division runs three kinds of HPF grants:

• Formula grants to state and tribal preservation offices, which keep them running and meeting their duties under the Act.
• Competitive grants, when Congress funds them — currently eight programs: African American Civil Rights, History of Equal Rights, Historically Black Colleges and Universities, Paul Bruhn Historic Revitalization Subgrants, Save America's Treasures, Semiquincentennial, Tribal Heritage and Underrepresented Communities.
• Disaster recovery grants for repairs to historic sites, when Congress appropriates them.

State and tribal offices use the money to nominate properties to the National Register of Historic Places, administer the Historic Tax Credit, review federal projects for their effect on historic places (Section 106 review, which the law requires with or without HPF money, and which programmatic agreements help move faster), survey historic properties, write preservation plans, help local governments and run federal grants.

Tribal Historic Preservation Offices are funded by their own formula, last set in 2015 with the tribes and the National Association of Tribal Historic Preservation Officers; money they do not use goes to Tribal Heritage Grants.

What it has achieved

Since 1977 the fund has supported more than 95,000 listings in the National Register, surveys of millions of acres, reviews of hundreds of thousands of federal projects, and the federal Historic Tax Credit, which has drawn $173.7 billion in private investment and created more than 2.8 million jobs. It sustains the partnership of 59 states, 208 tribes and over 2,080 local communities.

If it is not reauthorized

Deposits would stop, though Congress could keep appropriating from the balance of about $3.4 billion, as it did in 2016 and 2017. Without annual funding, most state offices would close and their duties under the Act would fall back on the Park Service, which would carry them out less efficiently.

Sources

• National Park Service, State, Tribal, Local, Plans and Grants Division, "Historic Preservation Fund Apportionment Update." https://www.nps.gov/articles/000/apportionment-update.htm
• Historic Preservation Fund: https://www.nps.gov/subjects/historicpreservationfund/index.htm · Certified Local Governments: https://www.nps.gov/subjects/clg/index.htm