United States: Integrating NEPA And NHPA Section 106 Reviews: New Guidance Document Provides Useful Advice, But Leaves Some Questions Unanswered

Elizabeth Lake is a Partner in our San Francisco office

The Council on Environmental Quality (CEQ), as part of its effort to modernize and reinvigorate the National Environmental Policy Act (NEPA), released two handbooks on March 5, 2013, that provide regulatory guidance to "encourage more efficient environmental reviews" under NEPA. (The NEPA handbooks are available online.)

One handbook, "NEPA and CEQA: Integrating State and Federal Environmental Reviews," is a draft guidance issued by CEQ and the California Governor's Office on Planning and Research that provides an overview of NEPA and the California Environmental Quality Act (CEQA) and advocates developing a combined review process for projects in California. This draft guidance is available for 45 days of public comment, with the comment period closing April 19 at 5 p.m. EST. (Please see our Environment alert, " Federal Efficiency/Streamlining: CEQ Issues New NEPA Guidance Documents," March 19, 2013, for more information.)

The other handbook, "NEPA and NHPA, A Handbook for Integrating NEPA and Section 106" (which is the subject of this alert), was issued by CEQ and the Advisory Council on Historic Preservation (ACHP) and explains how to coordinate NEPA and the National Historic Preservation Act (NHPA) Section 106 processes to better integrate consideration of historic resources in the environmental review, streamline the permitting process, and promote transparency and better agency decision-making.

The Section 106 and NEPA review processes can be time consuming and expensive for project proponents. Separate compliance tracks for the two statutes can create unnecessary duplication of work and potentially contradictory positions, and if challenged, can result in lengthy and costly litigation defense. The handbook provides welcome guidance for developing a strategy to manage and streamline the NEPA and NHPA processes. It does not, however, address some important questions that continue to bedevil agencies and project proponents, particularly as historical resources have risen in profile as a common litigation hook to challenge projects in California.


The NHPA was enacted in 1966 and requires federal agencies to consider effects of federal undertakings on historic properties prior to making a decision or taking an action. Federal agencies meet this requirement by completing the Section 106 consultation process set forth in the regulations, including consulting with certain specified parties, such as the state historic preservation officer and Native American tribes, if relevant. Under Section 106, the process concludes with an agency finding of "no historic properties affected," "no adverse effect," or "adverse effects." 36 CFR 800.6. When a federal agency has found that an undertaking may adversely affect historic properties, it must develop and consider alternatives or measures to avoid, minimize or mitigate effects, and for undertakings with an adverse effect, the federal agency usually executes a memorandum of agreement (MOU) or programmatic agreement (PA) that stipulates the resolution of adverse effects agreed to by the signatories. In those rare circumstances where there is a failure to reach an agreement, the ACHP issues formal advisory comments to the head of the agency, which then must consider those comments and respond prior to reaching a final decision. This process of consultation, effect findings, considerations of alternatives and mitigations, and agreement between the agency, the state historic preservation officer, applicant and other consulting parties can be a lengthy and uncertain process.

NEPA, enacted a few years later in 1970, expanded the environmental review process to require federal agencies to consider effects of proposed federal actions on the environment more generally. Federal agencies meet the NEPA requirement by preparing an environmental review document, which consists of a categorical exclusion (CE), an environmental assessment (EA) or an environmental impact statement (EIS), depending on the level of potential impacts.

  • A CE is prepared for the category of actions that are not expected to individually or cumulatively result in significant environmental impacts.
  • An EA is prepared when a CE is not appropriate and the agency needs to determine whether the proposed action will cause significant environmental effects. If a finding of no significant impact (FONSI) can be made as a result of the EA (which analysis may include consideration of mitigation measures), then with the EA/FONSI the NEPA process is complete.
  • An EIS, followed by a record of decision (ROD), together EIS/ROD, is prepared if the action is one that may significantly affect the human environment.

Neither statute mandates a particular outcome, but rather under both statutes, the impacts must be considered and the required processes must be followed. Separate compliance tracks for the two statutes can result in duplicative or sometimes contradictory efforts, and if challenged, can result in time consuming and expensive litigation defense. Combining the processes can also insert a schedule or timetable to the NHPA process, which may otherwise be missing, as the statute provides no required timelines.

The NEPA/NHPA Handbook

The handbook provides useful guidance on how to "integrate" the procedures required in NEPA and the NHPA, including considerations regarding when to "coordinate" the two review processes and when to "substitute" the NEPA process for Section 106. The guidance addresses a number of questions that look to resolve the differences in terminology and requirements between the two statutes and provides valuable guidance to practitioners seeking strategies to streamline and coordinate the processes. The handbook provides welcome guidance on several key questions, as follows:  

1. If an action "may affect" a historical resource under the NHPA, can the agency proceed with a CE under NEPA, or is a more intensive EA or EIS required?

Yes. The agencies may proceed with a CE even where an action "may effect" a historical resource. The handbook describes the complex interactions between the Section 106 inquiry and the level of environmental review required under NEPA, explaining that a "may effect" determination under the NHPA does not automatically disqualify the action from proceeding using a categorical exclusion, the least intensive environmental review under NEPA. Similarly, just because an action may generally qualify for a CE under NEPA does not eliminate the need to determine whether the action still qualifies as an undertaking requiring consultation under Section 106.

While agencies have generally agreed that an EA may be used under NEPA if the impact to the historical resource is mitigated, the question has not been so clear for CEs. As noted by the guidance, federal agencies can only proceed under the simpler CE if the action is the category of actions that qualify for a CE and there are no "extraordinary circumstances" that would warrant a more intensive review under an EA or EIS. The handbook instructs that when an agency determines that there may be adverse effects to historic properties under the NHPA, it must next consider whether the adverse effects constitute extraordinary circumstances. The handbook concludes that where the agency resolves the adverse effects to historic properties through the Section 106 process by avoiding, minimizing or mitigating such that the potential adverse effects no longer constitute "extraordinary circumstances," the agency can still meet its NEPA responsibilities with a CE. The guidance further instructs that the Section 106 process can identify when the adverse effects to historic properties constitute extraordinary circumstances. "Extraordinary circumstances," however, is not discussed in any detail. (See "Additional Questions" section, below.)

If a CE is used, the guidance instructs that the Section 106 process must proceed independently and in advance of issuing the CE.

2. If an action results in an "adverse effect" to a historical resource under the NHPA, can the agency proceed with an EA/FONSI under NEPA?

Yes. The guidance instructs that a finding of an adverse effect under NHPA does not necessarily mean that the use of EA/FONSI is precluded. Rather, the agency will still need to determine whether the environmental effects of the action on historic properties are "significant" within the meaning of NEPA. Significance under NEPA is determined based on context and intensity. Impacts are analyzed in several contexts such as society as a whole, the affected interests and the locality, and intensity is analyzed in terms of the severity of the effect. The guidance further explains that there are opportunities for considering mitigation measures that will avoid, minimize, rectify, reduce, eliminate over time, or compensate for adverse effects, and that use of such measures may inform the significance determination. However, "significance" in terms of differing types of effects (demolition, partial demolition, change to setting), is not discussed in any detail. (See "Additional Questions" section, below.)

If an EA is used, then the guidance instructs that the Section 106 process should be coordinated with the preparation of the EA and the FONSI may not be issued until the Section 106 process is concluded.

What is not clearly stated by the guidelines, but is true in practice is that the coordination of the NEPA and NHPA processes is more important when using an EA/FONSI or EIS than a CE, since the EA or EIS may be published prior to completion of the Section 106 findings. If Section 106 is not well advanced by the time the EA or EIS is published, then the opportunities for new information to be developed during the Section 106 process is higher, which could undermine the NEPA document and present recirculation/supplementation or litigation risks.

3. Are the recommended EIS and NHPA coordination steps set forth in the guidance?

Yes. Coordination during the EIS process starts with the preliminary analysis when the agency is developing the purpose and need and identifying interested parties, including potential cooperating agencies and consulting parties. The guidance instructs that this is the point where a comprehensive schedule should be developed. Next, the scoping notice should also act as the Section 106 public notification. Although Section 106 does not require that agencies identify and evaluate historic properties in the area of potential effects for all NEPA alternatives, because the preferred alternative, and therefore the final project to be approved, may not be known until the end of the NEPA process, the guidance advises that historical resources studies should cover all of the alternatives equally. In this way, additional Section 106 work will be avoided if an alternative other than the original proposed alternative is selected. However, it should be noted that this may be impracticable for larger projects. Next, the draft EIS can provide an opportunity to facilitate consultation by identifying historical properties, potential effects and proposing how to resolve adverse effects. The final EIS should attach the NHPA findings and MOA or PA, as relevant. Finally, the ROD should ensure that there is adequate mechanism for tracking and funding any commitments to avoid, minimize or mitigate effects to historical resources made in the EIS and MOA or PA.

4. Are the steps to substitute the NEPA process for the NHPA process the same for an EA/FONSI and EIS/ROD?

No. While the handbook instructs that substitution can be used when preparing an EA or an EIS, and in many respects the steps are the same, it also explains that the decision documents have different requirements. Specifically, under the EA process, a FONSI may not be used as the Section 106 decision document, and an MOA or PA is required to make the commitments binding, or receiving ACHP formal comments and responding. However, under the EIS process, the Section 106 decision may be documented in one of three ways — into the ROD, executing an MOA/PA, or receiving ACHP formal comment and responding.

The handbook provides specific detail regarding how to meet the substitution procedural requirements and standards during either the EA or EIS process. A useful checklist is provided as attachment C to the handbook.

5. Can an agency use another agency's NEPA document to also fulfill its NHPA obligations?

No. NEPA allows agencies to adopt another agency's EA and EIS to fulfill its NEPA requirements. However, such an adoption does not automatically fulfill the agency's Section 106 responsibilities. Specifically, if there is an "adversely effect" determination, then the MOA or PA needs to be amended to include the new federal agency.

Additional Questions Unanswered by the Guidance

While this handbook provides valuable guidance on NEPA and NHPA, it leaves unresolved some key areas that continue to bedevil agencies and project applicants, particularly in California. Specifically, additional guidance would be useful on the definition of "extraordinary circumstances" and on "significance" for historical resources under NEPA, particularly after the agency has entered into a MOA or PA. Will negotiating and entering into a MOU/ PA by itself justify a finding that there are no "extraordinary circumstances" or no "significance" within the meaning of NEPA? If not, what level of "resolution" in the MOU/PA is sufficient? Can demolition be mitigated? The handbook does not provide guidance about how to judge the importance of the historical resource (its "context") or the severity of the impacts (its "intensity") in light of either of these two standards.

These questions become particularly thorny in California, for example, where a project may be deemed to have "significant, unavoidable impacts" under CEQA, but traditionally would not have triggered the need for an EIS under NEPA. In California, the state "mini NEPA," CEQA, has different standards and definitions of significance (see discussion in NEPA/CEQA draft handbook). The state statute, guidelines and case law require that state agencies find significant, unavoidable impacts where a historical resource will be demolished, notwithstanding the provision of extensive mitigation, such as documentation and interpretation. Under NHPA and NEPA, however, documentation and interpretation are often mitigation measures incorporated into the MOU/PA, even for demolition, and generally, the federal agencies have found that to be sufficient mitigation for purposes of NEPA. This handbook does not squarely address the issue and leaves open the question of the definition of "extraordinary circumstances" and "significance" as it relates to impacts to historical resources for future challenges.

Navigating the Permit Process

Holland & Knight has extensive experience helping clients navigate the federal and state permitting process, including advising NEPA and the NHPA and keeping the environmental review process on track and on time. If you would like assistance in commenting on this guidance document or assistance in a specific project, please contact the author of this alert or another member of our West Coast Land Use and Environment Group.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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