SECTION 1. OPEN CONTAINER LAWS.

    (a) Establishment.--Chapter 1 of title 23, United States Code, is 
amended by adding at the end the following new section:
``Sec. 161. Open Container Limitations
    ``(a) Withholding of Funds for Noncompliance.--
            ``(1) General rule.--Beginning with fiscal year 1997, and 
        for each fiscal year thereafter, the Secretary shall withhold 5 
        percent of the amount required to be apportioned to a State 
        under paragraphs (1), (2), (5), and (6) of section 104(b) for 
        the fiscal year, if, for any period during the immediately 
        preceding fiscal year, the possession of any open alcoholic 
        beverage container, or the consumption of any alcoholic 
        beverage, in the passenger area of any motor vehicle located on 
        a public highway, or the right-of-way of a public highway, in 
        the State is lawful.
            ``(2) Limitation of application to charter buses.--If a 
        State has in effect a law that makes the possession of any open 
        alcoholic beverage container unlawful in the passenger area by 
        the driver (but not by a passenger) of a motor vehicle designed 
        to transport more than 10 passengers (including the driver) 
        while being used to provide charter transportation of 
        passengers, the State shall be deemed in compliance with 
        paragraph (1) with respect to the motor vehicle for each fiscal 
        year during which the law is in effect.
    ``(b) Period of Availability; Effect of Compliance and 
Noncompliance.--
            ``(1) Funds withheld on or before september 30, 1997.--
                    ``(A) Period of availability.--Any funds withheld 
                under this section from apportionment to any State on 
                or before September 30, 1997, shall remain available 
                for apportionment to the State as follows:
                            ``(i) If, but for this section, the funds 
                        would otherwise have been apportioned under 
                        section 104(b)(5)(A), the funds shall remain 
                        available until the end of the fiscal year for 
                        which the funds are made available.
                            ``(ii) If, but for this section, the funds 
                        would otherwise have been apportioned under 
                        section 104(b)(5)(B), the funds shall remain 
                        available until the end of the second fiscal 
                        year following the fiscal year for which the 
                        funds are made available.
                            ``(iii) If, but for this section, the funds 
                        would have been apportioned under paragraph 
                        (1), (2), or (6) of section 104(b), the funds 
                        shall remain available until the end of the 
                        third fiscal year following the fiscal year for 
                        which the funds are made available.
                    ``(B) Funds withheld after september 30, 1997.--No 
                funds withheld under this section from apportionment to 
                a State after September 30, 1997, shall be available 
                for apportionment to the State.
            ``(2) Apportionment of withheld funds after compliance.--
        If, before the last day of the period for which funds withheld 
        under this section from apportionment are to remain available 
        for apportionment to a State under paragraph (1), the State 
        brings into effect a law that is in compliance with subsection 
        (a), on the day following the effective date of the law, the 
        Secretary shall apportion to the State the withheld funds 
        remaining available for apportionment to the State pursuant to 
        paragraph (1).
            ``(3) Period of availability of subsequently apportioned 
        funds.--
                    ``(A) In general.--Any funds apportioned pursuant 
                to paragraph (2) shall remain available for expenditure 
                as follows:
                            ``(i) Funds apportioned under section 
                        104(b)(5)(A) shall remain available until the 
                        end of the fiscal year succeeding the fiscal 
                        year for which the funds are apportioned.
                            ``(ii) Funds apportioned under paragraph 
                        (1), (2), (5)(B), or (6) of section 104(b) 
                        shall remain available until the end of the 
                        third fiscal year succeeding the fiscal year 
                        for which the funds are apportioned.
                    ``(B) Unobligated sums.--Sums that are not 
                obligated on the termination of the period referred to 
                in subparagraph (A) shall--
                            ``(i) lapse; or
                            ``(ii) in the case of funds apportioned 
                        under section 104(b)(5), lapse and be made 
                        available by the Secretary for projects in 
                        accordance with section 118(b).
            ``(4) Effect of noncompliance.--If, on the termination of 
        the period for which funds withheld under this section from 
        apportionment are available for apportionment to a State under 
        paragraph (1), the State does not have in effect a State law 
        that is in compliance with subsection (a)--
                    ``(A) the funds shall lapse; or
                    ``(B) in the case of funds withheld from 
                apportionment under section 104(b)(5), the funds shall 
                lapse and be made available by the Secretary for 
                projects in accordance with section 118(b).
    ``(c) Definitions.--As used in this section:
            ``(1) Alcoholic beverage.--The term `alcoholic beverage' 
        has the meaning provided the term in section 158(c).
            ``(2) Motor vehicle.--The term `motor vehicle' has the 
        meaning provided the term in section 154(b).
            ``(3) Open alcoholic beverage container.--The term `open 
        alcoholic beverage container' has the meaning provided the term 
        in section 410.
            ``(4) Passenger area.--The term `passenger area' shall have 
        the meaning provided by the Secretary by regulation.''.
    (b) Conforming Amendment.--The analysis for chapter 1 of title 23, 
United States Code, is amended by adding at the end the following new 
item:

``161. Open container limitations.''.
Output: Requires the Secretary of Transportation, beginning with FY 1997, to withhold five percent of the amount required to be apportioned to a State under specified Federal highway provisions if it is lawful in such State to:  (1) possess an open alcoholic beverage container in the passenger area of any motor vehicle on a public highway; or (2) consume any alcoholic beverage in such motor vehicle on a public highway. 
Exempts from such withholding measures charter buses designed to transport more than ten passengers whose drivers are not permitted by State law to possess open alcoholic beverages in the passenger area. 
Provides for the release of withheld funds to States which comply with this Act.