You're an official of a state agency with plans to build a highway, using federal funds, over a course that would require the destruction of an historic building sitting in its path. Can you do it? Or should you reroute the highway to preserve the building? What are your responsibilities under the law?

Questions like these were explored by several dozen federal, state and local officials last week during a two-day training course on federal projects and historic preservation law. The course, jointly presented by the Advisory Council on Historic Preservation and the U.S. Office of Personnel Management, is designed to acquaint officials with the process required by law for any project that affects an historic property if it uses federal money or needs a federal license.

In fact, in the highway case described, the agency involved took great pains and spent several million dollars extra to reroute the highway around an historic farmhouse. Several years later, the owner of the building demolished it.

One lesson: "It is not prudent to spend millions of dollars without a guarantee of the federal investment," advised Robert M. Utley, the instructor of the course and former director of the Office of Archeology and Historic Preservation of the National Park Service.

Participants are taught how to identify an historic property, how to assess the effect of the undertaking on the property and how to resolve any adverse effects. The roster of "students" at last week's course included officials from the Department of the Army, General Services Administration, Interior Department, National Aeronautics and Space Administration, U.S. Postal Service, Baltimore, Macon, Ga., Wilmington, Del., Harrisburg, Pa., and Essex County, New Jersey.

"The purpose of the course is to impart a basic understanding of the review process required by the National Historic Preservation Act of 1966," Utley said. He stressed that it doesn't require that an historic property be left untouched at any cost. "The law does not mandate preservation; it just guarantees that it be taken into consideration with other factors," he said. The hope is that "the best balance between preservation and development" will be struck, he added.

The law requires specifically that any federal official having direct or indirect jurisdiction over a proposed federal or federally assisted undertaking in any state and any office having to license any such undertaking first must "take into account" the effect of the undertaking on any district, site, building, structure or object that is included in, or eligible for inclusion in, the National Register of Historic Places. The law also requires that the Advisory Council on Historic Preservation be given the opportunity to comment on the proposed undertaking. The council is a 19-member independent agency that acts as adviser to the president and Congress on preservation matters.

About 2,000 federal "undertakings" a year trigger the review process--anything involving federal funds, loans, grants, loan guarantees, licenses, permits and insurance. Typical projects that could require review under the law include in-town commerical or housing developments and the construction of highways, pipelines, dams and power plants.

But other undertakings activate the law. Utley noted that the law could have been triggered when a company applied for a Civil Aeronautics Board certificate to operate a helicopter service between National and Dulles airports, because the helicopter would have flown over, and had an audible effect on, the historic C&O Canal, and when a post office in an historic building in Boise, Idaho, planned to add access for the handicapped.

The historic preservation law even played a part in a controversy over the National Aeronatics and Space Administration's desire to dismantle what some consider the "historic" tower at Cape Canaveral, Fla., used to launch man's first trip to the moon.

Some historic properties will be known easily to officials: All 28,000-plus historic districts, archeological sites, buildings, structures and objects listed in the National Register of Historic Places would trigger the law's Section 106 review process. But officials also are required to follow the process when a federal undertaking would affect a property that is "eligible" for listing on the National Register. This means that agencies have to seek advice about what properties are worthy of preservation for significance in American history, architecture, archeology and culture, including those that are locally valued, and to survey lands under their jurisdiction to identify such properties. Questions about whether a property is "eligible" can be answered by the keeper of the National Register.

The law also outlines the procedures that must be followed to make certain that preservation factors are weighed with cost-benefit and other factors. It is designed to resolve conflicts between federal undertakings and historic properties in a manner that reflects "the public interest" rather than a purely project or purely preservation interest, Utley noted. "There are no real absolutes; this is a flexible standard," he said.

If an agency follows the procedures in good faith, it will have "taken into account" preservation values as required and not be vulnerable to litigation, Utley advised.

To determine what effect an undertaking might have on an historic property, the agency has to look at any change enhancing or diminishing the quality of the property--any change in the integrity of the qualifying characteristics that made the property eligible for the National Register.

How do you assess an adverse effect? If a dam inundates an archeological site or a shopping center obliterates an historic district or new aluminum windows are added to a Georgetown house, there has been destruction or alteration of the property. If a highway cuts off an historic district from its surroundings--such as a once-proposed highway that would have isolated New Orlean's Vieux Carre from the Mississippi River--its environment would have been altered adversely.

The agency also must consider whether the undertaking will have any visual, audible or atmospheric effects on a property, such as the helicopter service or the visual damage a skyscraper next to a low-rise historic district will cause. Additionally, if a federal agency proposes to transfer any property of National Register quality, the process is triggered, and the transfer instrument usually requires certain things of the recipient.

If an agency finds there will be no adverse effects, and the Advisory Council concurs, it can proceed with the undertaking. But a finding of an adverse effect triggers a consultation process--including a preliminary case report, on-site inspection and public information meeting--which brings together the undertaking agency, the state historic preservation office and the council to consider ways to avoid or mitigate the adverse effect. Other parties, such as a city seeking a federal grant for a project, also may participate.

Typical mitigation measures include limiting the magnitude of the undertaking, modifying it through redesign or reorientation of the project site, repairing or restoring the affected building, preservation or maintenance operations, recovering archeological data before the site is altered and documenting any structures that may be damaged or destroyed. "Sometimes creative planning can achieve a tradeoff and the project can go forward without unacceptably damaging the environment," Utley noted.

If the consultation process fails to produce a resolution, the Advisory Council takes up the proposed undertaking, but its decision is purely advisory. The agency head is required to consider the council's comments but isn't required to abide by them. "You can be sued in court for procedural lapses but not for the final outcome" Utley said.