(a) The agency may relinquish to the town in which it is located any portion of the state highway system located on land acquired or to be acquired by the United States or any agency of the United States as contemplated by section 1901 of this title.

(b) When the entire section of an existing state highway which is replaced or to be replaced as contemplated by section 1901 of this title, is not in fact ultimately acquired by the United States, and so much of the section as is not so acquired is, in the judgment of the board, no longer needed as a part of the state highway system, the board may relinquish control of that portion to the town in which that portion is located. However, for the provisions of this chapter, the national system of interstate and defense highways shall not be considered as a replacement for existing state highways. (Added 1985, No. 269 (Adj. Sess.), § 1; amended 1989, No. 246 (Adj. Sess.), § 20.)