Welf. & Inst. Code, § 10426

(a) If an agreement is reached between the Governor, through the Department of Human Resources or the Governor’s designee, and the certified provider organization, they shall jointly prepare a written memorandum of understanding, which shall be presented, when appropriate, to the Legislature for determination.

(b) (1) If any provision of the memorandum of understanding requires the expenditure of funds, those provisions of the memorandum of understanding shall not become effective unless approved by the Legislature in a Budget Act. If any provision of the memorandum of understanding requires legislative action to permit its implementation by amendment of an existing statute, those provisions of the memorandum of understanding shall not become effective unless approved by the Legislature.

(2) If the Legislature does not approve or fully fund any provision of the memorandum of understanding that requires the expenditure of funds, either party may reopen negotiations on all or part of the memorandum of understanding.

(3) This section does not prevent the parties from agreeing and effecting those provisions of the memorandum of understanding that have received legislative approval or those provisions that do not require legislative action.

(c) A memorandum of understanding between the Governor, through the Department of Human Resources or the Governor’s designee, and the certified provider organization shall be binding on all state departments and agencies and any political subdivision of the state that are involved in the administration of the state-funded early care and education program and the relevant contractors or subcontractors of those departments and agencies.

(d) This chapter does not alter the requirements governing the early care and education reimbursement system that are set forth in Section 10228 and in Article 1 (commencing with Section 18074) of Chapter 19 of Division 1 of Title 5 of the California Code of Regulations.