The state highways designated as parts of the state highway system shall include the sections of such highways lying within the limits of incorporated municipalities, and such sections shall be equally as eligible in all respects to receive the attention of the department for construction, reconstruction, and maintenance as are the sections of the highways lying wholly without incorporated places. But the department shall not share in the cost of any construction or improvement made by any municipality on any street or highway prior to the date the road or street so constructed or improved was added to the state highway system.

But nothing in this chapter shall prevent a municipality from undertaking any improvements or performing any maintenance work on state highways in addition to what the department is able to undertake with the available funds. The Department of Transportation shall not, however, be liable for damages to property or injuries to persons, as otherwise provided for in § 15-78-10 et seq., as a consequence of the negligence by a municipality in such improvements or maintenance work by a municipality.