Welf. & Inst. Code, § 10427

(a) If a memorandum of understanding has expired, and the Governor or the Governor’s representative and the certified provider organization have not agreed to a new memorandum of understanding and have not reached an impasse in negotiations, subject to subdivision (b), the parties to the agreement shall continue to give effect to the provisions of the expired memorandum of understanding, including, but not limited to, all provisions that supersede existing law, any arbitration provisions, any no strike provisions, and any provisions covering membership dues consistent with Section 10426.5.

(b) If, after a reasonable period of time, the parties fail to reach agreement, the parties may agree upon the appointment of a mediator mutually agreeable to the parties, or either party may declare that an impasse has been reached and request the board to appoint a mediator. When both parties mutually agree upon a mediator, costs of mediation shall be divided one-half to the state and one-half to the certified provider organization. A memorandum of understanding reached by means of mediation is subject to appropriation by the Legislature and necessary statutory revisions.

(c) After the mediation procedure has been exhausted, and no resolution has been reached by the parties, the Governor, or the Governor’s representative, may declare an impasse and implement any or all of its last, best, and final offer. Any proposal in the Governor’s, or the Governor’s representative, last, best, and final offer that, if implemented, would conflict with existing statutes or require the expenditure of funds, shall be presented to the Legislature for approval. Implementation of the last, best, and final offer does not relieve the parties of the obligation to bargain in good faith and reach an agreement on a memorandum of understanding if circumstances change, and does not waive rights that the certified provider organization has under this chapter.