(a) The department may enter into cooperative agreements with a municipality for the construction or maintenance of a connecting highway that is part of the state highway system and located within the municipality. (b) The jurisdiction, control, and duty of the department and municipality with respect to connecting highways is as follows: (1) The department has no authority to change or establish a grade of a connecting highway without approval of the governing body of the municipality. (2) The municipality shall at its own expense maintain all underground facilities in a connecting highway and has the right to construct necessary additional underground facilities. (3) The municipality may grant the privilege to open the surface of a connecting highway, but the municipality shall promptly repair all damage occasioned by the opening of the surface. (4) Subject to law the municipality has the exclusive right to grant franchises over, beneath, and upon a connecting highway. However, it may not grant a franchise for transportation of passengers in motor vehicles on a connecting highway without the approval of the department.
Alaska Legal Code