IMHO B that is correct

States now have an incentive to lower the blood alcohol level that constitutes drunk driving by a federal law that withholds highway funds from those states that don't enforce the applicable standard.

a) that constitutes drunk driving by a federal law that withholds
b) that constitutes drunk driving, because a federal law withholds
c) that constitutes drunk driving, because a federal law withheld
d) which constitutes drunk driving by a federal law that withholds
e) which constitutes drunk driving, because a federal law withholds

That is restrictive and Which is nonrestrictive. Could someone explain?

A- IS WRONG AS drunk driving by a federal law... seems as if federal lar is driving drunk

d,e are wrong, as u say which is arestrictive clause, it should come after comma

c is wrong because withheld is in past........

so, B should be the answer

OA please........

Experts correct me if I am wrong and Provide me the meaning of the sentence as it seems to me incomplete ?
_____

is there really a difference in grammar between B and E?

just
that vs. which
==

only 'that' can follow the noun closely
'which' can't do that...

it might be caused by the 'restrictive and nonrestrictive'

I always choose "that" over "which". Which is always used with unnecessary information, where you can neglect and still make sense of the sentence.

Ex: The new Airbus, which is more fuel efficient than Boeing Dream liner, increased traffic congestion at airports around the world.

This is the first question I encounter that gives an answer for each.

so hwiya, what's the OA please ?

I will also go with B