(1)    The department and any county or group of counties may contract for the cooperative establishment and use of state-local shared correctional facilities. Inmates sentenced to the Wisconsin state prisons, a county jail, a county reforestation camp or a county house of correction may be transferred to a shared facility by the department, sheriff or superintendent, respectively, under the agreement covering use of the facility. Any inmate confined in a state-local shared correctional facility shall be deemed to be serving time in the penal institution to which he or she was sentenced and shall be eligible to earn good time credit against his or her sentence as provided under ss. 302.11, 302.12, 302.43, 303.07 and 303.19 for that institution.

   (2)   Costs of establishment and use of state-local shared correctional facilities shall be borne in accordance with the contract between the department and the cooperating county or counties. The contract shall provide for administration of the facility, establish criteria and a procedure for transfer of inmates to and from the facility and allow for dissolution of the agreement. The contract may exempt inmates at the shared facility from rules governing inmates at other prisons and county correctional facilities and, within statutory authority, establish separate rules for the facility.

   (3)   Any county jail, reforestation camp established under s. 303.07, county house of correction or rehabilitation facility established under s. 59.53 (8), whether operated by one county or more than one county, may be a state-local shared correctional facility.

   (4)   The Taycheedah Correctional Institution may not be used as a state-local shared correctional facility.