(1) An incorporated area or unincorporated urban place may elect, with the concurrence of the Department of Highways, to construct, reconstruct, or maintain urban roads and streets which are included in the Department of Highways' state primary road system and are maintained by the Department of Highways.
(2) The Department of Highways cannot initiate the expenditures of funds allocated pursuant to KRS 177.365 on any roads or streets classified by the Department of Highways as being a part of the state primary road system as defined in KRS 177.020.