When residents of the historic 19th-century mining town of Wallace, Idaho, first saw the plans for an elevated interstate running through their town, "they were irate," said Robert R. Garvey, executive director of the Advisory Council on Historic Preservation.

Now, after six years of negotiations facilitated by the federal advisory council, said Garvey, town residents and the federal Department of Transportation have reached some agreement about a compromise for the Spokane-to-Denver interstate.

"The first proposal was going to make Wallace look like the part of Georgetown under the Whitehurst Freeway," Garvey said. "Now they have a plan that is much more reasonable."

But as preservationists applaud the advisory council for helping the Federal Highway Administration agree to a plan that will save the historic character of Wallace, the Office of Management and Budget has criticized the council for holding up a federal project.

Since 1980, said Garvey, the advisory council and OMB have been "struggling" with proposed changes to the council's regulations. OMB, concerned that delays like those in Wallace have cost the government money that could otherwise be saved, has pushed for changes that would curtail the council's role. Established in 1965, the Advisory Council on Historic Preservation is a 19-member council appointed by the President to oversee federally funded projects that affect historic properties.

Under the current regulations, the council helps federal agencies negotiate agreements with state preservation offices and private preservation groups, agreements that -- according to its charter -- should lessen the adverse effect federal projects have on historic sites.

New regulations approved by the council and OMB this summer, however, would change the process, and preservationists from all corners of the country are complaining that the changes would "take the teeth" out of the council's review process.

"The concern is that if you move the process to the state and local level it will be much more susceptible to political pressure," said Robert Peck, president of the D.C. Preservation League.

"There is nothing more political at the local level than real estate and land-use issues, and since the state preservation officers are appointed by their governors, they are subject to political pressure."

The proposed regulations, now being circulated for public comment, would change many of the advisory council's procedures. Currently, federal agencies are required to alert state preservation offices about projects that could possibly affect historic sites, and the state offices are then required to alert the public and take public views into account when negotiating with the federal agency.

The new regulations would allow federal agencies to determine whether a project would affect a historic site without consulting with the state offices, and they would no longer require the state agency to incorporate public opinion in reaching a decision on a specific project.

The new regulations also would allow federal agencies to stop consultations with the state preservation officer at any time and would limit the advisory council's role to one of advising federal agencies rather than one of facilitating negotiated agreements.

The new regulations also would limit the advisory council's time to consider a federal project to 60 days.

"The problem with the regulations, as we see it, is that they will make it necessary for private preservation groups to go to court if they want to have a role in saying what happens to a historic site sitting in the way of a federal project," said Nellie Longsworth, president of Preservation Action, a national preservation lobby. "If you have something that works fairly well, as we think the advisory council does, we don't see why it has to change."

Garvey, who agrees that the proposed changes would reduce the public's voice in such decisions, said that only a handful of cases actually take as long as the Wallace case.

"Most of the decisions are made between the federal agency and the state historic preservation office anyway," Garvey said. "Only a few thousand of the federally funded projects that impact historic properties come to the council for comment, and sometimes it is something as small as an agency asking if it can clean a historic building."

Garvey said that when the comment period ends next month, the council may make changes to the proposed regulations to accommodate some of the complaints.