(a) The department shall provide an independent appeal procedure to each contracting agency providing child care and development services pursuant to Section 10268.5 that shall be conducted by the Office of Administrative Hearings and shall be provided upon an appeal petition of the contracting agency in any of the following circumstances:

1. (1) Termination of a contracting agency’s contract.
2. (2) Denial of more than 4 percent or twenty-five thousand dollars ($25,000), whichever is less, of a local contracting agency’s contracted payment for services schedule.
3. (3) Demand for remittance of an overpayment of more than 4 percent or twenty-five thousand dollars ($25,000), whichever is less, of a local contracting agency’s annual contract.