(1) An animal shelter or pet animal rescue shall not release a dog or cat to a prospective owner unless:

(a) The animal has been sterilized by a licensed veterinarian; or

(b)

(I) The prospective owner signs an agreement to have the animal sterilized by a licensed veterinarian within ninety days after the date of release and deposits a fee, in an amount specified by rule of the commissioner, with the animal shelter or pet animal rescue.

(II) Upon receiving a written statement from the licensed veterinarian who performed the sterilization procedure that the dog or cat has been sterilized, the animal shelter or pet animal rescue shall refund the deposit to the prospective owner.

(III) If the prospective owner fails to provide the animal shelter or pet animal rescue with a written statement from a licensed veterinarian stating that the veterinarian performed a sterilization procedure on the dog or cat within ninety days after signing the agreement:

(A) The prospective owner shall forfeit the deposit and the animal shelter or pet animal rescue shall forward the amount of the deposit to the pet overpopulation fund created in section 35-80-116.5 (5) or a local dedicated spay and neuter fund; and

(B) The animal shelter or pet animal rescue may promptly reclaim the animal from the prospective owner.

(2) If a licensed veterinarian declares in writing that a sterilization procedure could jeopardize the life or health of the dog or cat, the procedure may be delayed until such time that a veterinarian determines that the dog or cat is fit to undergo the sterilization procedure. At such time, the prospective owner shall have the animal sterilized. If the determination of unfitness for sterilization has been made prior to release, the animal shelter or pet animal rescue may release the dog or cat to the prospective owner, subject to the provisions of this subsection (2).

(3) This section shall not apply to:

(a) The release of a dog or cat to a person with prior and continuing ownership rights to the dog or cat who is reclaiming the animal from an animal shelter or pet animal rescue;

(b) The transfer of an animal from an animal shelter or pet animal rescue to another animal shelter or pet animal rescue or to a veterinarian;

(c) Animal shelters or pet animal rescues with existing sterilization programs that ensure that every dog or cat is sterilized before being released; or

(d) Public animal shelters eligible for waiver of licensing fees pursuant to rules promulgated by the commissioner.

(4) Nothing in this section shall preclude a town, city, county, or city and county from adopting, maintaining, or enforcing an ordinance that exceeds the minimum requirements adopted by the commissioner in implementing and enforcing this section. Nothing in this section shall preclude a licensed animal shelter, whether public or private, from adopting, maintaining, or following a policy that exceeds the minimum requirements adopted by the commissioner in implementing and enforcing this section.