Amends and makes organizational changes to GS 136-66.8 concerning agreements with local governments.

Current subsection (a) authorizes DOT to enter into agreements with units of local government for the purpose of expediting transportation projects currently programmed in the Transportation Improvement Program. Adds to subsection (a), authorizing the Department of Transportation (DOT) to also enter into agreements with units of local government for the purpose of funding preliminary engineering for projects not currently programmed in the Transportation Improvement Program but programmed in the immediately preceding Transportation Improvement Program. Adds new subsection (b1) requiring the authorized preliminary engineering agreements to be between the DOT and units of local government, and requiring the unit of local government to fund 100% of the preliminary engineering funding at current prices. Allows units of local government to be reimbursed for the amount expended in accordance with the agreement in a future year when the project is funded from State and federal sources. 

Makes technical changes to subsection (b) to clarify the provisions of subsection (b) only apply to the existing authorization in subsection (a), now organized by this act to subdivision (1).

Makes technical changes throughout the statute to refer to the Transportation Improvement Program instead of the Transportation Improvement Plan. 

Amends the reporting requirement by the DOT to require annual reporting (currently, one report to be submitted by December 1, 2006) to the Joint Legislative Oversight Committee on any agreements executed with units of local government pursuant to the statute.