"The Section 106 process seeks to accommodate historic preservation concerns with the needs of Federal undertakings through consultation." It is the responsibility of federal agencies, not just land-managing or funding agencies. It applies to ALL federal undertakings, not just those on federal land or those who spend federal monies. It does not necessarily lead to the preservation of historic properties.
Prior to any funding, approval or carrying out of an undertaking, a Federal agency must, in consultation with other parties:
A project, activity, or program funded in whole or in part under the direct or indirect jurisdiction of a Federal agency, including those carried out by or on behalf of the Federal agency; those carried out with Federal financial assistance; and those requiring a Federal permit, license or approval.
The process of seeking, discussing, and considering the views of other participants, and, where feasible, seeking agreement with them regarding matters arising in teh section 106 process.
If the project will diminish any of the following:
through physical destruction or damage; through inappropriate alterations; by removing it from its historic setting; by changing its use or setting if they are a significant part of its historic value, by creating visual, atmospheric or audible intrusions; by demolishing it through neglect or by the unrestricted transfer from federal ownership then you have adverse effects and the project must be mitigated for a resolution.