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Letter from FHWA Chief Counsel's Office to the Rhode Island Division

Legal Opinion Re: Federal-Aid Participation in Payments for
Tribal Services Under the National Historic Preservation Act

Chief Counsel HCC-1

Ms. Melisa Ridenour
Division Administrator
Providence, RI

Issue
This is in response to your request for a legal opinion whether the Federal Highway Administration (FHWA) may participate in a payment made by a State for tribal consultation and related services performed pursuant to Section 106 of the National Historic Preservation Act. The short answer is yes, federal-aid funds may participate in such payments, but only within certain parameters that will be set forth below.

Background: Relevant Historic Preservation Law The National Historic Preservation Act of 1966 (NHPA), 16 U.S.C. § 470 et seq., directs federal agencies to consider preservation values when planning projects. Section 106 of the NHPA requires agencies to consult with the designated State Historic Preservation Officer (SHPO) prior to taking any action that may affect a site included in or eligible for inclusion in the National Register of Historic Places. See 16 U.S.C. § 470a(a)(1)(A).

In 1992, the NHPA was amended to recognize the importance of traditional religious and cultural properties, and the role that Indian tribes should play in preserving those properties and related resources. See Title XL, Pub. Law 102-575, 106 Stat. 4753, Oct. 30, 1992. Under authority of the 1992 amendment, the Secretary of the Interior has approved 17 Tribal Historic Preservation Officers (THPOs). These certified THPOs are formally responsible for carrying out on tribal lands any or all of the functions previously assigned to the SHPO. 64 Fed. Reg. 11736 (Mar. 9, 1999). Certified THPOs are eligible to receive financial assistance (up to 100%) from the Secretary of the Interior to fund their programs. 16 U.S.C. §§ 470d(2)(E)(4) & 470e(3)(C)(5). In cases where a THPO is not formally designated, the Tribal Chair may designate a tribal member to participate in a Section 106 consultation.

Last year, the Advisory Council on Historic Preservation (Advisory Council) issued new regulations implementing Section 106. The new regulations require Federal agencies to make a reasonable and good faith effort to identify any Indian tribe that attaches religious and cultural significance to historic properties affected by an undertaking, regardless of the undertaking's location, and to invite such tribes to become consulting parties during the project's planning stages. 36 CFR 800.3(f)(2). On tribal lands, the agency must determine if a THPO has assumed the role of the SHPO, and consult accordingly. 36 CFR 800.3(c)(1) & (d). In evaluating the National Register eligibility of identified properties, the agency must acknowledge the special expertise of interested tribes in assessing cultural and religious significance. 36 CFR 800.(4)(c)(1). Finally, the agency should seek the concurrence of the tribe in any Memorandum of Agreement (MOA) drafted to conclude the consultation process. 36 CFR 800.(5)(c)(2)(ii). An MOA prepared under the NHPA typically includes determinations of effect, as well as treatment and mitigation measures.

Analysis
FHWA's ability to fund any activity is limited by what Congress has authorized in the relevant statutes. Regarding the establishment and general operating costs of a THPO, there is simply no authority for FHWA participation, as Congress has clearly placed this responsibility in the Department of the Interior. See NHPA sections cited above. In addition, FHWA participation is limited by the Title 23 requirement that "[a]ny State desiring to avail itself of the provisions of this title shall have a State transportation department which shall have adequate powers, and be suitably equipped and organized to discharge to the satisfaction of the Secretary the duties required by this title." 23 U.S.C. 302.

Congress recently reaffirmed the principle that States must pay their own environmental overhead expenses in the Transportation Equity for the 21st Century Act (TEA-21). In the name of "Environmental Streamlining," TEA-21 permits limited FHWA participation in other State and Federal agency costs of providing necessary environmental review for Federal-aid projects. Section 1309(e), Pub. Law 105-178, (June 9, 1999). However, the funding is limited to the "additional amounts that the Secretary determines are necessary * * * to meet the time limits for environmental review," "if such time limits are less than the customary time necessary for such review." Id.

Thus, as a general rule, all overhead costs of organizing and maintaining THPO offices should continue to be left to the State and Tribal governments. Examples of "overhead" in the instant case would include the cost of securing office space and utilities, paying salaries of administrative personnel, and purchasing office equipment. Establishment of a tribal museum, curation, and the study of cultural objects would also fall into the overhead category.

Apart from the overhead costs described above, project-specific tribal consultation costs and expenses may be eligible in appropriate circumstances. Deciding whether consultation will be funded for a particular project, however, is a question left to the State. Neither the NHPA nor the Section 106 regulations requires payment to any consulting parties. While in the past Congress has occasionally authorized special FHWA funding for other classes of tribal expenses, this has not occurred for Section 106 consultation. For example, section 2004(h)(4) of the Intermodal Surface Transportation Act provided that "In the case of a local highway safety program carried out by an Indian tribe, if the Secretary [of Transportation] is satisfied that a tribe does not have sufficient funds for the nonfederal share, the Secretary may increase the federal share to the extent necessary." Pub. Law No. 102-240 (Dec. 18, 1991). In the absence of such a provision to fund the THPOs' work, the funding of other types of tribal expense suggests that Congress only intends funding where specifically authorized.

There are several reasons for concluding that project-specific tribal consultation costs agreed to by a State could be eligible for FHWA participation. First, recent guidance on archeological resources issued by the Advisory Council recommends that all consulting parties be kept informed as the data recovery plan is implemented, and notes that for large, unusual, or complex projects, "special oversight" may be appropriate. 64 Fed. Reg. 27085-86, (May 18, 1999). Tribal oversight when especially extensive or complex resources are expected would seem to fall into the special oversight category. Second, the "Necessary Expense Doctrine" provides that when determining which project costs are eligible for Federal participation, FHWA may look beyond the four corners of a statute to its underlying purposes to determine what Congress intended as a reasonable ancillary expense. FHWA has applied this doctrine in various cases to permit participation in any cost incidental to the "construction" of projects, as defined in 23 U.S.C. 101. Environmental mitigation costs have been deemed incidental to construction. U.S. v Union County 16.29 Acres of Land, More or Less, 35 F. supp. 2d 773, 776 (D. Ore. 1997); see also 23 U.S.C. § 109(h), requiring consideration of the costs to minimize adverse environmental impacts in project decisions.

Third, no legal precedent within FHWA precludes participation in project-specific tribal consultation costs and expenses. There are two relevant prior legal opinions. First, a 1976 opinion concluded that only preliminary archeological and preservation costs are eligible for reimbursement, as opposed to prolonged and detailed off-site analysis or curation of the removed materials. In so finding, it was noted that "the salaries, fees, and expenses incurred by a salvage authority are eligible for reimbursement to the extent that such costs are attributable to and supported as part of the project cost." Op. Of 2/2/76 entitled "Preservation of Historic and Archeological Material," p.7. While few tribes could qualify as a salvage authority, the idea that a tribal consultation representative may be reimbursed for project specific expenses is analogous. Another legal opinion, in 1995, determined that FHWA may participate in project-related costs incurred by States to comply with the Native American Graves Protection and Repatriation Act (NAGPRA). NAGPRA is a Federal statute dealing with the preservation and return of Indian remains and related cultural resources. P.L. 101§601, 104 Stat. 3048 (codified at 25 U.S.C. § 3001§3013). Reimbursement under the 1995 opinion is strictly limited to costs arising from projects constructed on Federal and Tribal lands, because NAGPRA itself is so limited; but again the principle that NAGPRA compliance costs are eligible for FHWA participation is analogous to the question at hand.

Finally, FHWA's current environmental regulations provide for participation in all costs necessary to mitigate the adverse impacts of the project to the human and natural environments, so long as the cost (1) actually results from FHWA's action and (2) the proposed measure is deemed a reasonable public expenditure after considering the impacts of the action and the benefit of the proposed mitigation measure. 23 CFR 771.105(d). An FHWA Division Office would need to make these two specific findings prior to approving participation in tribal consultation costs for a particular project. Guidance to the States as to when tribal consultation expenses could be considered a "reasonable public expenditure" should focus upon the totality of the circumstances present in each project. As a starting point, the Advisory Council's new regulations require an acknowledgment of the special expertise of the tribe in applying the National Register criteria. 36 CFR 800.4(c)(1). Other relevant factors, depending on the project, may be the nature and extent of the known and expected cultural resources within the project area, the complexity of the project, the experience and qualifications of the consultant staff, the uniqueness of the resource, and the nature of the proposed treatment measures. FHWA's designated Historic Preservation Officer, Bruce Eberle, should be consulted whenever additional direction is needed in a specific instance. A final limitation that should be kept in mind is that the Department of the Interior's THPO certification is only available to Indian tribes formally recognized by the United States as independent sovereigns. 64 Fed. Reg. 11736 (Mar. 9, 1999); see also 25 CFR Part 83 (setting forth the process for formal recognition of Indian tribes). The U.S. Department of Transportation's Order regarding "Programs, Policies, and Procedures Affecting American Indians, Alaska Natives, and Tribes" also recognizes the agency's unique government-to-government relationship with Federally recognized tribes. DOT Order 5301.1 (Nov. 16, 1999). Accordingly, FHWA participation arising from Section 106 consultation should be limited to activities performed by a certified THPO or an officially designated tribal member of a Federally recognized Indian Tribe.

Once it is determined that tribal consultation will be reimbursed for a particular project, it is advisable for the State and FHWA to enter into a Memorandum of Understanding with the THPO or designated tribal representative as to exactly what costs and expenses will be eligible for reimbursement. Furthermore, any eligible costs and expenses must be reasonable. General terms such as "monitoring" should be avoided in place of specific direction. For example, the agreement might reimburse periodic observation of the archeological excavation by a designated tribal official, with a consultation meeting if an object of potential interest to the tribe is uncovered. Transportation to and from the site for the activities might be reimbursed, as well as per diem expenses where the distance is great. Overhead expenses, as defined above, should be specifically excluded. Again, I encourage you to consult with Bruce Eberle for advice in applying this legal opinion to any particular project.Conclusion
When a State so requests, FHWA may participate in eligible project-specific consultation costs and/or expenses incurred by a THPO or designated tribal representative. However, (1) FHWA participation is expressly limited to reimbursing those reasonable costs over and above general operating or overhead costs, (2) participation must be approved in advance, (3) FHWA's approval must be supported by an MOU or written contract and (4) prior to approval, the Division should make a determination that the requirements of 23 CFR 771.105(d) are satisfied.

Karen E. Skelton