1. (1) Determination of Authorized Uses. The Department shall determine how local highway authorities may spend class B or class C road funds as the Legislature directs and consistent with applicable law. A local highway authority may not violate applicable state or federal law when expending class B or class C road funds.

2. (2) Local highway authorities may only spend class B or class C road funds for the following purposes:

   1. (a) to construct and maintain eligible class B or class C roads and to maintain class D roads;

   2. (b) to install and maintain traffic and pedestrian safety devices, including:

      1. (i) sidewalks;
      2. (ii) curb and gutter on eligible class B or class C roads and state highways;
      3. (iii) traffic signals, including necessary control devices, enclosures, electrical service equipment, and support structures;
      4. (iv) traffic signs, including associated lighting, electrical service, and mounting equipment;
      5. (v) street lighting, including necessary electrical service equipment and support structures;
      6. (vi) bicycle facilities in the highway right-of-way;
   3. (c) to procure, lease, or rent equipment used to construct and maintain class B or class C roads or to maintain class D roads;
   4. (d) for design, engineering, or administration work directly related to road maintenance and construction of class B or C roads or to maintain class D roads;
   5. (e) for future reimbursement of other funds for class B or class C road construction projects;
   6. (f) to acquire highway rights of way;
   7. (g) to build fencing and cattle guards associated with class B or class C roads;

   8. (h) to meet match requirements for federal match funding; or

      1. (i) to appropriate investment to gain value, provided net gains remain in the fund and are spent for authorized use.
3. (3) Leasing Equipment. Equipment purchased with class B or class C road funds may be leased from a local highway authority to another public entity using the schedule of equipment rates posted on the Federal Emergency Management Agency, or FEMA website at, https://www.fema.gov/schedule-equipment-rates.
4. (4) Emergency Use. A local highway authority may use equipment purchased with class B or class C road funds for purposes not otherwise authorized by Rule R926-3 in an emergency to make repairs and prevent further damage.
5. (5) Multiple-Use Facilities. Local highway authorities may construct multiple-use facilities by mixing funds on a proportional basis, including constructing road maintenance buildings, storage sheds, and yards.
6. (6) R.S. 2477 Issues. Class B or class C road funds may be used to pay the costs of asserting, defending, or litigating R.S. 2477 issues as authorized by Section 72-2-110.

7. (7) Non-Permissible Uses. Non-Permissible uses of class B and class C road funds include the following:

   1. (a) non-road uses;
   2. (b) police costs;
   3. (c) to pay for the rental of equipment of a type that the local highway authority previously purchased with class B and class C road funds; or
   4. (d) except for circulator alleys in municipalities as authorized by Section 72-3-104, to build or maintain alleys.

KEY: transportation policy, highway finances, highway, roads

Date of Last Change: April 3, 2024

Notice of Continuation: August 14, 2021

Authorizing, and Implemented or Interpreted Law: 72-2-109