The Department shall designate appropriate representatives to participate in collective bargaining with the provider organization certified as the exclusive representative of family child care providers. Except as otherwise provided in this subtitle, the parties shall adhere to the bargaining process set forth in § 3–501 of the State Personnel and Pensions Article. The Department shall negotiate in consultation with the Department of Budget and Management regarding all matters that require appropriation of State funds. Collective bargaining shall include all matters related to the terms and conditions of participation by family child care providers in the Maryland Child Care Subsidy Program, including: Reimbursement rates; Benefits; Payment procedures; Contract grievance procedures; Training; Member dues deductions; and Other terms and conditions of participation by family child care providers in the Maryland Child Care Subsidy Program. Subject to subparagraph (ii) of this paragraph, collective bargaining may include negotiations relating to the right of a provider organization that is the exclusive representative to receive service fees from nonmembers. The representatives of the State may not reach an agreement containing a service fee provision unless the representatives of the State conclude that the agreement as a whole will not adversely impact nonmember providers. A family child care provider whose religious beliefs are opposed to joining or financially supporting any collective bargaining organization is: Not required to pay a service fee; and Required to pay an amount of money as determined in collective bargaining negotiations, not to exceed any service fee negotiated under paragraph (1) of this subsection, to any charitable organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code and to furnish to the Department and the exclusive representative written proof of the payment. Collective bargaining shall include negotiations that result in the establishment of a fund for the purpose of protecting family child care providers against extreme hardship or loss of livelihood resulting from late State payments. The exclusive representative shall pay for a portion of the fund. The fund: May not be a State fund; but Shall be established and administered in consultation with the State. All revenues, money, and assets of the fund belong solely to the fund and are held by the fund in trust for family child care providers. The State may not borrow, appropriate, or direct payments from the revenues, money, or assets of the fund for any purpose. The fund shall include funds sufficient to meet the reasonably foreseeable needs of the family child care providers. Notwithstanding subsection (d) of this section, the representatives of the State: May not be required to negotiate any matter that is inconsistent with applicable law; and May negotiate and reach agreement with regard to any such matter only if it is understood that the agreement with respect to such matter cannot become effective unless the applicable law is amended by the General Assembly. The parties shall reduce their agreement to a Memorandum of Understanding that complies with the provisions of § 3–601 of the State Personnel and Pensions Article.