National Park Service, Cultural Resources, Heritage Preservation Services
Strategies for Protecting Archeological Sites on Private Lands

FINANCIAL STRATEGIES FOR PROTECTING ARCHEOLOGICAL SITES ON PRIVATE LANDS

FINANCIAL OPTIONS

Protecting archeological sites requires adequate and often continuing financial resources. There are a variety of methods and sources of funding for site protection; effective site protection may depend upon taking advantage of more than one strategy.

NONPROFIT FINANCING OPTIONS
STRATEGY BENEFITS PAY SPECIAL ATTENTION TO
Conventional Loan. A loan or mortgage is obtained from an institutional lender (e.g., bank or savings and loan). Process is familiar and less time-consuming than fundraising. Large, up-front financial resources are not needed, since payments are spread over a specified period of time. May still need to fundraise a sizeable down payment. Requires a lengthy financial commitment, and interest rates may be high unless the nonprofit can take advantage of low-interest loan programs.
Fundraising. Soliciting contributions from foundations, corporations, the local community, and others to support the purchase of a property.
See Case Study 1; Case Study 4
Can generate publicity and community support for the resource protection purchase. Easier to raise funds for a specific project than for an ongoing program. The processes of fundraising and applying for funding grants can be difficult, complicated, and time-consuming. Competition for funds can be fierce.
Revolving Fund, Loans, or Grants. Governments and nonprofits offer financial assistance, through revolving funds, low-interest loans, and/or grants, for the acquisition of properties to protect sensitive resources; revolving fund programs encourage use of these funds on revenue-generating projects that can reimburse the fund. Lowers acquisition costs for the nonprofit or local community. Agency or nonprofit with a revolving fund can often respond quickly to emergencies by acquiring threatened properties. These financial programs may not provide full funding, so the recipient can be required to contribute financially. Funding focus on revenue-generating projects may have limited use for protecting archeological sites in place.
Partial or Limited Development. Developing a portion of the property, often through clustering or other resource-sensitive design technique, and restricting the uses on the remainder of the property so the sensitive resources there can be protected, either through easement, donation, or jointly by owners of the developed parcels. Sale of developed parcels finances resource protection and management. If entire property is to be sold as a unit, it may be more affordable to a buyer since resource protection restrictions can lower the price. Developer will expect a financial return on his or her investments. Process can be complex and financially risky. Public may misunderstand the resource protection component of the development project.

GOVERNMENT FUNDING SOURCES
STRATEGY BENEFITS PAY SPECIAL ATTENTION TO
Federal Historic Preservation Fund. Federal funds provided to states on a 60-40 matching basis to fund grants for the identification, evaluation, registration and treatment of historic places. Administered by State Historic Preservation Offices, at least 10% of the state's allocation must go to Certified Local Governments. Provides financial support to local communities to locate sites, nominate properties to the National Register of Historic Places, prepare preservation plans, and develop preservation strategies. Funds are rarely available for acquisition. Local communities must be able to match the grant funds.
General Fund Appropriation. Funds are allocated from the state or local government treasury for acquisition.
See Case Study 7; Case Study 10
Paying the entire purchase price eliminates interest and loan costs. Availability of budget appropriations can be uncertain and amounts may be too small to finance needed acquisitions. Other programs may compete for same funds.
Bond Issue. Issuing bonds to borrow money, which are repaid with interest in a certain period of time, is a common technique used by governments to finance the acquisition of open space and conservation lands. The issuance of bonds usually must be approved through general public referendum vote.
See Case Study 10
Sizeable amounts of funds can be available fairly quickly to finance acquisition programs. Acquisition costs are spread out over a long period of time. Intensive political and public relations effort required to secure bond act passage. Bond interest repayment costs included in the costs of acquisition.
State Grants, Low Interest Loans. Some states provide matching grant or low interest loan programs to support local government or nonprofit acquisition of open space, conservation lands, or easements. Reduces acquisition costs by local communities and nonprofits. Match requirements encourage local involvement and commitment to the acquisition project. Local communities and nonprofits are often required to match state funds. Competition for funding may exclude some needy projects. Contributions to the fund from the state general fund may vary from year to year.
Payment in Lieu of Dedication. A developer may have the option or may be required to pay a fee instead of dedicating specified lands for open space or other public use. Provides funding to acquire more appropriate resource protection lands than may be available in development projects. Controversial technique; legality has been questioned in some communities.
Impact or Project Review Fees. Some communities charge impact fees to defray the costs of infrastructure and amenities needed by new development. Other communities charge a fees to cover costs of reviewing development project proposals and plans.
Development pays for its impact on the community. Fees could be used to fund salaries of professional review staff, as is done in St. Augustine, Florida (see Appendix 4 for excerpts from St. Augustine's Archaeological Preservation Ordinance). Availability of funds depends upon the rate of development. The state must grant the local government the authority to levy impact fees.
Real Estate Transfer Tax. A small portion of the local tax on real estate transfers is allocated to a fund set up for the acquisition of resource protection lands.
Case Study 10
Funds are generated and used within the local community, decreasing reliance on state or federal financial assistance. In high growth communities, a sizeable fund can accumulate. Fund income fluctuates based on the real estate market. Can cause higher real estate prices, resulting in higher costs for resource protection lands.
Other Funding Sources. Funding for resource protection lands can also be provided from a variety of sources, such as state income tax return check-off, user fees, document recording stamp taxes, dedicated commodity taxes, and lottery sales. Tax return check-offs allow the taxpayer to allocate a certain amount of his or her tax to a special fund for resource protection. Other taxes and fees, such as sales, gasoline, cigarette, and vending machine taxes, as well as resource exploitation and specialty license plate fees, are also used to fund acquisition and historic preservation activities. In some states, lottery or gambling proceeds provide major funding for resource protection, conservation, and historic preservation activities.
See Case Study 7; Case Study 10
These sources can provide a relatively consistent funding source targeted specifically to the acquisition and management of resource protection lands. There may be heavy competition for most of these funding sources, and fund amounts may not be adequate to meet the need. Those who pay these taxes may want a voice in how the taxes are spent. Establishing new taxes is not popular. Portion of funds needs to be allocated to managing the lands and resources that are acquired.

FINANCIAL INCENTIVES
STRATEGY BENEFITS PAY SPECIAL ATTENTION TO
Actual Use or Preferential Assessment. Special programs have been established in all 50 states where the assessed value for certain types of land, such as agricultural lands or open spaces, can be based on actual use rather than on full market value according to highest and best use potential for development. There are often penalties requiring repayment of full back taxes if such a property is converted to another use. Property tax burden is reduced, encouraging owners to retain properties in open space or other resource-sensitive uses. Penalty payments can be dedicated to a fund for acquiring resource protection lands. Owner participation is voluntary. Programs are usually temporary, and may not transfer with the land when the property is sold. Amount of tax savings may not outweigh sale income for development. Reduces local community tax revenues.
Property Tax Reduction. Property taxes are reduced due to change in method of assessment (e.g. actual use), property is listed on the National or State Register of Historic Places, or its value is reduced due to protective restrictions.
Case Study 11
Landowner's property tax bill is reduced. Local government property tax revenues are reduced. Some property tax reduction programs may be temporary. Owner may not view the property tax reduction to be a sufficient incentive. Determination of easement's value may vary depending on level of local assessor's expertise.
Income Tax Reduction. Donation or bargain sale of full or partial interest in land to a qualified organization for conservation purposes in perpetuity can reduce a landowner's federal income taxes; state tax reduction may also be taken.
Case Study 12
Landowner's income tax is reduced. Must meet IRS rules of charitable donation. Size of tax reduction is usually not enough to be a major motivation for owners to donate land.
Estate Tax Reduction. The donation or bargain sale of partial interest in land reduces the assessed value of the land due to the restriction placed on its use. The resulting lowered land value is reflected in a lower estate value, which reduces estate taxes. Reduction in inheritance taxes. Heirs may not need to sell land to pay the tax. Careful estate planning can ensure effective site protection. Must meet IRS rules for estate taxes. For farmland with reduced value due to actual use assessment to qualify under federal law for reduced estate taxes, certain criteria must be met which may be different than under state law.


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