The Section 106 Rewrite and What It Changes for Grant Recipients
Most federal awards carry a historic preservation review that never appears as a line in the budget. It shows up instead as a delay, a consultation letter, or a condition written into the notice of award. That review is Section 106 of the National Historic Preservation Act, and on July 24, 2026, the Advisory Council on Historic Preservation voted to advance the largest rewrite of the rules behind it in more than twenty years.
The vote moves the proposal forward. It does not change the regulation yet. The revised language goes to the Office of Management and Budget, then publishes in the Federal Register for a public comment period expected to run 30 days, then returns to the Council for a final vote. Until that sequence finishes, the current version of 36 CFR Part 800 governs every project you have. The window is short, and it is also where comment carries the most weight, so local governments and nonprofits benefit from understanding the proposal now rather than after publication. As with every shift in federal requirements, organizations with systems already in place keep serving their communities while the rules move around them.
What Section 106 Requires Right Now
Section 106 applies to federal undertakings. That word does a lot of work, and it is the reason this reaches your award rather than staying inside federal construction offices.
Undertaking. Any project, activity, or program funded in whole or in part under the direct or indirect jurisdiction of a federal agency, including anything carried out with federal financial assistance. A grant-funded sidewalk, sewer line, community center rehabilitation, or shelter renovation is an undertaking.
Under the current regulation, the agency responsible for the undertaking initiates consultation, invites the State Historic Preservation Officer or Tribal Historic Preservation Officer and other consulting parties to the table, identifies whether historic properties are present, and assesses whether the project would cause an adverse effect. When an adverse effect exists, the parties work toward avoiding, minimizing, or mitigating it, and the outcome gets recorded in a Memorandum of Agreement or a Programmatic Agreement.
The process reaches roughly 120,000 projects each year and covers about 1.4 million sites listed on or eligible for the National Register of Historic Places. Eligibility matters as much as listing. A building with no plaque and no designation still triggers review if it meets the criteria.
What the Council Approved
The ACHP describes the revisions as a way to add clarity, provide regulatory certainty, and reduce delay. The substance reaches further than that framing suggests, and the changes compound.
What the proposal would do
- Narrow the definition of historic property. Only sites with tangible human improvements would qualify, and the site would need to be geographically compact. Cultural landscapes, viewsheds, and traditional cultural properties largely fall outside that line.
- Narrow adverse effect. Effects would be limited to those that are reasonably foreseeable, closely caused by the undertaking, and involving material alteration. Changes to setting and other indirect effects are reduced or removed.
- Make public comment discretionary. Agencies would weigh whether public involvement is worth the associated cost and delay.
- Remove the entitlement of local governments to consult. Preservation organizations and members of the public would no longer be recognized as consulting parties, and the requirement to consult with Tribes comes out.
- Replace step-by-step consultation with a single agency report. The agency would identify properties, evaluate effects, and determine mitigation, then circulate the finished analysis for comment.
- Make mitigation discretionary. Memoranda of Agreement become optional. Agencies could instead issue a unilateral Memorandum of Decision explaining how they will address effects or why other considerations outweigh preservation.
The provision with the widest reach for grant recipients is drawing the least attention. The proposal would exclude broad categories of federally connected actions from review entirely: state or locally administered federal programs, projects involving minimal federal funding or control, and actions carried out under delegated federal authority. It would also align many NEPA categorical exclusions with Section 106, so a project already excluded from environmental review could drop out of preservation review at the same time.
A review requirement that leaves the regulation does not leave the project record.
Where This Lands in Your Grant Work
If your organization receives federal funds through a state agency, a council of governments, or any other pass-through, you sit squarely inside the category the proposal would exclude. CDBG, HOME, FTA formula programs, EDA public works, and state-administered infrastructure dollars all move through that channel. It is also the channel where the Uniform Guidance changes taking effect October 1 reach pass-through entities and subrecipients, so the same offices absorb both.
Read as a budget question, the change cuts both directions. A project that no longer needs consultation saves the weeks and the consultant fees that review consumes. A project that has relied on a Programmatic Agreement for years loses a predictable path and gains an open question. Several industry and development voices have raised the same concern during this cycle: predictable early information is what prevents expensive surprises late, and a process that hands down a finished agency determination rather than consulting early can raise risk rather than lower it.
There is a second-order effect worth planning around. Removing a federal review does not remove state and local preservation ordinances, state environmental policy acts, or the conditions a funder writes into an award. Where the federal floor drops, state and local requirements become the operative constraint, and those vary by jurisdiction.
Section 106 rarely operates alone in any case. It sits alongside NEPA, Davis-Bacon, and the 2 CFR 200 revisions moving on a parallel track. Two significant rewrites of federal award requirements are in motion at once, and they will land on the same staff.
What Happens Next and What You Can Do
The proposal now goes to OMB for review, then to the Federal Register, then through a public comment period expected to run 30 days, then back to the Council for a final vote. Nothing changes on your active awards until that sequence finishes.
- Inventory your active awards for Section 106 conditions. Pull the award terms and note which projects carry a consultation requirement, a Memorandum of Agreement, or a Programmatic Agreement. If you rely on a Programmatic Agreement for a recurring program, that agreement has the most exposure to a rewrite of the underlying regulation.
- Call your SHPO or THPO. State and Tribal preservation offices are tracking this closely and know how the proposal would hit projects in your jurisdiction. They are also the parties whose role the proposal reduces, which makes them both well informed and easy to reach.
- Keep the review files you already have. Consultation correspondence, effect determinations, and executed agreements stay part of the audit record regardless of what the final rule says. That material is also part of the documentation that shows a funder you can deliver.
- Draft your comment before the docket opens. A 30-day window fills quickly. Comments carry more weight when they describe a specific project, a specific timeline, and a specific cost, so write that example down now and file it on regulations.gov the day the docket opens.
- Check your state and local requirements. Identify which of your projects would still face preservation review under state law or local ordinance if the federal requirement narrows. Building flexibility into how you plan and budget starts with knowing which constraints are actually yours.
Section 106 has shaped how federally funded projects get built for sixty years, and the version that emerges from this rulemaking will shape the next stretch. The organizations that come through it well are the ones taking inventory now, documenting what they already have, and deciding what they want to say while the comment window is still ahead of them.
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