A. The director of the state department of corrections may enter into an agreement with a city, county jail district, county, or city and county to permit transfer of prisoners in the custody of the director of the state department of corrections to a jail or other adult correctional facility of such city, county jail district, county, or city and county, if the sheriff or corresponding official having jurisdiction over such facility has consented thereto. The agreement shall provide for payments to the city, county jail district or county in an amount sufficient to reimburse the full costs attached to housing a prisoner otherwise sentenced to the state department of corrections. The amount of payment in the agreement shall be based on an annual audit by the auditor general which shall report the direct average daily cost.

B. When an agreement entered into pursuant to subsection A is in effect with respect to a particular local facility, the director of the state department of corrections may transfer prisoners whose terms of imprisonment have been fixed to such facility if each transfer receives written approval from the sheriff or chief of police.

C. Prisoners so transferred to a local facility may, with approval of the sheriff, participate in programs of the facility, including work furlough rehabilitation programs. Prisoners so transferred remain in the constructive custody of the director but are subject to the rules of the facility in which they are confined. The state department of corrections shall bear the expense of any special program which is a required condition of confinement. If the state department of corrections does not pay these costs of confinement within fifteen days after receiving written notice from the sheriff or as may be otherwise provided in the terms of a written agreement between the state department of corrections and the sheriff, the sheriff may return the prisoner to the state department of corrections by delivering the prisoner to the nearest state correctional facility.