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U.S. Department of Transportation U.S. Department of Transportation Icon United States Department of Transportation United States Department of Transportation

Public Roads - Spring 1996

The National Highway System Designation Act of 1995

by Nancy Bennett

The National Highway System Designation Act of 1995 (P.L. 104-59) was signed by President Clinton on Nov. 28, 1995. Summarized below are the major provisions of the legislation.

National Highway System

System Designation

The legislation designates the National Highway System (NHS), developed by the Department of Transportation (DOT) in cooperation with the states, local officials, and metropolitan planning organizations (MPOs). DOT proposed the system to Congress on Dec. 9, 1993, as required by the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). The system approved by Congress reflects modifications agreed upon by DOT and Congress as of Nov. 13, 1995. The total mileage is about 260,000 kilometers (160,955 miles) and includes the Interstate Highway System, as well as other roads important to the nation's economy, defense, and mobility.

ISTEA set a deadline of Sept. 30, 1995, for Congress to establish the system. Until the system was designated, the law prevented future NHS and Interstate Maintenance (IM) funds from being released to the states. With the enactment of the NHS legislation, the $5.4 billion of fiscal year (FY) 1996 funds were distributed to the states.

Future Modifications

NHS is a dynamic system that can change in response to future travel and trade demands. The NHS legislation permits the secretary of transportation to approve most of the modifications to the system (except connections to major intermodal terminals, see below) without congressional approval. The state must cooperate with local and regional officials in proposing the modifications. In metropolitan areas, the local and regional officials shall act through the metropolitan planning organizations.

Connections to Major Intermodal Terminals

Within 180 days of enactment, the secretary must send to Congress proposed NHS connections to major intermodal facilities - ports, airports, rail terminals, etc. There will be a one-time congressional approval of the intermodal connections.

Working with the state DOTs, the Federal Highway Administration (FHWA) has identified connections to 1,166 intermodal terminals that warrant being included in NHS. The connections serve 198 ports, 207 airports, 307 public transit stations, 67 Amtrak stations, 82 intercity bus terminals, 190 rail/highway terminals, 37 ferry terminals, 58 pipeline terminals, and 20 multipurpose passenger terminals. Collectively, about 2,900 kilometers of roads and streets, which provide important connections to these terminals, have been identified for inclusion in NHS.

The completion of this important element of NHS involved FHWA's extensive consultation with the other modal administrations within DOT, the state transportation agencies, national organizations, and public interest groups. Criteria were developed through a collaborative process and used by the states and MPOs to identify terminals which warrant an NHS connection.

Although the NHS connections must be submitted to Congress for approval, the proposed connections are already eligible for funding with NHS funds. The NHS Designation Act established interim eligibility for these connections, pending approval by Congress.

In the future, the secretary may modify the connections proposed by the states in cooperation with MPOs and local and regional officials.


National Maximum Speed Limit

This act repeals the law that required that the states, as a condition of receiving federal-aid highway assistance, adhere to a national maximum speed limit. The provision will take effect 10 days after enactment. An exception to the 10-day period is provided if the legislature of a state is not in session on the date of the bill's enactment and the governor declares, before the end of the 10-day period, that the legislature is not in session and the state prefers an applicability date for the repeal of the national maximum speed limit law that is after the date on which the legislature will convene. If this occurs, then the federal repeal is applicable to the state on the 60th day following the date on which the legislature next convenes.

The secretary must submit a report to Congress by Sept. 30, 1997, of the record of each state that raised its speed limit above the current maximums. The human and economic costs, as well as any benefits, should be included in the study.

Motorcycle Helmets

The law that penalized states that did not enact motorcycle helmet requirements is repealed. The penalty was a forced transfer of funds from federal-aid highway construction programs to safety programs.

Zero Tolerance for Blood Alcohol Content in Minors

The states must enact and enforce a law that considers an individual under the age of 21 who has a blood alcohol concentration of 0.02 percent or greater while operating a motor vehicle to be driving while intoxicated or driving under the influence of alcohol. States failing to meet this requirement will have 5 percent of their highway construction funds withheld beginning Oct. 1, 1998. The penalty is increased to 10 percent on Oct. 1, 1999, for fiscal year 2000 and for each fiscal year thereafter.

National Driver Register

The $2.55 million authorization of this National Highway Traffic Safety Administration (NHTSA) safety program is extended for another year.

Motor Carrier Provisions

Commercial Motor Vehicle Safety Pilot Program

This legislation establishes a pilot program to exempt vehicles that weigh between 4,500 and 11,700 kilograms (10,000 and 26,000 pounds) and the drivers from the Federal Motor Carrier Safety Regulations. The program will begin within 270 days after enactment.

Applicants must meet specific requirements to participate. They must have a satisfactory safety rating or meet criteria established by the secretary. Vehicles transporting more than 15 passengers or hazardous materials are not eligible for the program. Through monitoring and reporting of safety-related data, the secretary will decide whether participants may continue in the program.

Within three years of enactment, the secretary must conduct a zero-based review to determine the need, costs, and benefits of the regulations to determine whether they should apply to this group of vehicles and their drivers. After the review is completed, the secretary shall grant such exemptions or modify or repeal existing regulations as appropriate.

Exemptions From Hours-of-Service Regulations and Commercial Driverfs License (CDL) Regulations

This act provides exemptions from the hours-of-service regulations for specific industry groups, including: transporters of agricultural commodities and farm supplies, ground water well drilling rigs, utility service vehicles, and construction equipment and materials.

Replacement drivers of snowplows are exempted from CDL requirements when the normal operator is unable to operate the snowplow or if a snow emergency requires additional operators. The secretary is required to conduct a regulatory review of these exemptions to determine the impact of such exemptions on public safety.

Winter Home Heating Oil Delivery State Flexibility Pilot Program

The secretary is directed to implement a one-season pilot program of up to five states to permit the states to exempt the hours-of-service regulations for drivers of intrastate home heating oil deliveries that occur within 160 direct-line kilometers (100 air miles) of a central terminal or distribution point. The pilot program is limited to the winter heating season following Nov. 1, 1996.

The program requires the states to meet several safety and enforcement criteria. The secretary may suspend a state's participation if a state has not complied with the criteria. After the program is completed, the secretary will review the results to determine whether to amend the regulations to provide flexibility to motor carriers delivering home heating oil during winter periods.

Key Leaders in Congress On Surface Transportation Issues and Legislation

Senate Environment and Public Works Committee


Senate Transportation and Infrastructure Subcommittee


House Transportation and Infrastructure Committee


House Surface Transportation Subcommittee


Mitigation of Section 1003(c)


Section 1003(c) of ISTEA required that, in accordance with the Budget Enforcement Act of 1990, authorizations from the highway account of the Trust Fund for FY 1992-96 be held to $98.6 billion. Authorizations in that period exceeded the limit by $2.55 billion. This meant that FY 1996 authorizations had to be cut 12.54 percent across the board to hold total funding to the $98.6 billion maximum allowed. The NHS legislation contains two provisions to partially mitigate the effects of this cut.

Funding Restoration

This law provides in FY 1996 $291.5 million ($266.5 million authorized from specified rescissions and reductions plus $25 million transferred from congestion pricing funds) to be distributed to the states by percentages specified in the NHS legislation. In FY 1997, $180 million ($155 million authorized from specified rescissions and reductions plus $25 million transferred from congestion pricing funds) will be distributed to the states.

The above amounts are derived from various rescissions, reductions, and transfers, including:

  • Selected demonstration project funds.
  • A portion of the administrative funds of FHWA.
  • Magnetic levitation prototype development funds for FYs 1996 and 1997.
  • High-speed ground transportation technology demonstration funds for FY 1997.
  • Part of the FHWA Section 402 safety funds.
  • Part of the FY 1997 NHTSA highway safety program funds.
  • Unobligated Congestion Pricing Pilot Program funds and FYs 1996 and 1997 authorizations for the program.

The funding restoration amounts may be used for any project eligible under Chapter 1 of Title 23. They are available for four fiscal years and are subject to the obligation limitation. They are not subject to administrative takedowns.

Urban areas with more than 200,000 people are guaranteed a certain share of the funding restoration amounts received by a state.

States may spend up to 0.5 percent of the funding restoration amounts on metropolitan planning and up to 1.5 percent for State planning and research.

State Unobligated Balance Flexibility

States are allowed to designate part of their unobligated balances that existed on Sept. 30, 1995, for use on projects of their choice that are eligible under Chapter 1 of Title 23.

First, the secretary will determine, as soon as possible, the amount of unobligated balance that each state may designate for flexible use. That amount will equal the amount of the reduction of each state's FY 1996 funds as a result of Section 1003(c) minus restoration funding the state receives under the NHS legislation.

Second, the states will notify the secretary, within 30 days of enactment (or as soon as possible), which unobligated program funds it will use flexibly. Within 45 days of enactment (or as soon as possible), the secretary must make the funds available for flexible use.

The funds under this section are available for projects under Chapter 1 of Title 23, will be available for the same period for which such amounts were originally made available, and will be subject to the obligation limitation.

The restrictions are:

  • Unobligated balances of Surface Transportation Program funds attributed for areas over 200,000 may be used flexibly only if the MPO for a particular area concurs in writing.
  • Transportation enhancement funds and congestion mitigation and air quality improvement (CMAQ) funds may not be used flexibly unless the state has exhausted all flexibility and transferability provided under Title 23 and this section and still does not have sufficient funds available for a project.
  • No more than one-third of interstate construction unobligated balances may be used flexibly.

Innovative Financing

State Infrastructure Bank (SIB) Pilot Program

Up to 10 states or multistate entities are allowed to establish transportation infrastructure banks; DOT will establish procedures for choosing the participants in the program. The infrastructure banks may be used to make project loans, enhance credit, subsidize interest rates, and provide other assistance for eligible highway and transit capital projects. The funds from the bank may not be used as a grant. The recipients of the assistance can be public or private entities.

No new federal-aid funds are provided to capitalize the banks. States entering into cooperative agreements with the secretary to establish infrastructure banks could contribute up to 10 percent of several categories of their federal-aid highway and federal transit funds to capitalize the bank. Funds attributable to urban areas with more than 200,000 people could only be used with permission of the MPO for the area. States must match 25 percent (lower for sliding-scale states) of the federal contribution with funds from non-federal sources. Federal-aid funds are considered obligated when contributed to the bank.

By March 1, 1997, the secretary must have reviewed the financial condition of each transportation infrastructure bank and must report to Congress with an evaluation of the pilot program.

Eligibility of Bond and Other Debt Instrument Financing for Reimbursement as Construction Expenses

States are allowed to use federal-aid funds for bond principal, interest costs, issuance costs, and insurance on Title 23-eligible projects. Although these costs are eligible for federal participation, such eligibility does not constitute a federal commitment or guarantee on the part of the United States to provide for payments of principal and interest.

Limitation on Advance Construction

States are permitted to advance construction projects provided the project is on the statefs transportation improvement program (STIP). This eliminates the requirements that: (1) future year authorizations had to be in place in order to advance construct and (2) the total of advance construction projects could not exceed a cumulative dollar limit.

Toll Roads - Federal Share for Highways, Bridges, and Tunnels

The federal share for toll projects is set at a maximum of 80 percent of eligible costs. Before this change, the federal share for toll projects varied from 50 percent to 80 percent, based on activity and system designation.

Toll Roads - Loan Program

This act allows federal-aid loans to non-tolled projects with dedicated revenue streams and permits interest rates at or below market rates, as needed, to make the project feasible. Repaid funds can now be used to credit-enhance similar projects.

Donations of Funds, Materials, or Services for Federally Assisted Projects

This legislation allows private funds, materials, or services to be donated to a specific federal-aid project and permits the state to apply the value to the state's matching share. Before this change, states could receive credit only for donations of private property incorporated into a federal project or for state and local funds.


In addition to the safety mandates discussed above, the NHS legislation removes and adds other mandates to the program.

Removal of Mandates

Suspension of Management Systems

The states may choose not to implement in whole or in part any of the management systems required under ISTEA. The secretary may not impose the 10 percent penalty on funds if the state elects this option.

The comptroller general, in cooperation with the states, is required to report to Congress by Oct. 1, 1996, recommending to what extent the management systems should be implemented.

Asphalt Pavement Containing Recycled Rubber

The penalty and requirements related to state use of crumb rubber are eliminated.

Metric System

No state may be required to erect or modify any highway signs to the metric system. Also, until Sept. 30, 2000, any metric activity by the states related to federal-aid highway projects is optional.

Additional Mandates

Quality Improvement

States are required to conduct an analysis of the life-cycle costs of each usable segment of NHS costing $25 million or more.

Value Engineering

States are required to carry out value-engineering analyses for all projects on NHS costing $25 million or more.

Other Provisions

Scenic Byways

A state may exclude from a state-designated scenic byway any segment of highway that it determines does not possess the scenic criteria for which the byway is designated. This is a codification of the DOT's interpretation of current law.

Motorist Call Boxes

Signs identifying free motorist-aid call boxes and their sponsorship by corporations or other organizations are allowed on call boxes and call box posts in highway rights-of-way. Signs are limited in size, limited to one per every eight kilometers, and 20 percent must be outside of urban areas.

Transportation Enhancements

Streamlining Measures - As an alternative to waiting for reimbursement of funds, states now have the flexibility to obtain a federal advance of funds for transportation enhancement activities, provided that the state has a project selection process that involves other public agencies and citizens who have expertise related to transportation enhancements.

Environmental Compliance - The secretary is directed to develop, to the extent appropriate, categorical exclusions for transportation enhancements and to work with the Advisory Council on Historic Preservation and the National Conference of State Historic Preservation Officers to develop a nationwide programmatic agreement for the process for reviewing the effects that transportation enhancement activities have on historic properties.

Applicability of the Uniform Act to Conservation Organizations - Rules for how to treat land acquisitions made by non-profit conservation organizations where the land is subsequently incorporated into a transportation enhancement activity are provided. In general, the conservation organization would be treated as a private property owner, except when acting as an agent of a state government or when acquisition has prior federal approval.

Transportation Conformity

This act clarifies that the transportation conformity requirements of Title 23 and the Clean Air Act Amendments of 1990 (CAAA) apply only to areas designated as "nonattainment" and to areas that are redesignated to attainment and must submit a maintenance plan under the CAAA. A conformity analysis only needs to be done for specific transportation-related pollutants for which an area is designated as nonattainment.

Congestion Mitigation and Air Quality Improvement (CMAQ) Program

The amount of CMAQ funds apportioned to each state is frozen to FY 1994 levels. Funds may be used in areas designated as nonattainment or in maintenance areas that were formerly nonattainment areas under the Clean Air Act. In addition, states now have the ability to receive credit against their share of project costs through donations.

More information about the National Highway System Designation Act of 1995 is available on the Internet World Wide Web. The easiest way to access this information is to go to the Department of Transportation home page ( and then, in turn, click on Browse DOT Administrations, Federal Highway Administration, What's New, and NHS Designation Act of 1995.

Nancy Bennett is chief of the Program Coordination and Legislation Team in FHWA's Office of Policy Development. She has worked in FHWA for 23 years.