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AB-962 Hospitals: procurement contracts: disclosures.(2019-2020)

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Date Published: 04/08/2019 02:00 PM
AB962:v98#DOCUMENT

Amended  IN  Assembly  April 08, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 962


Introduced by Assembly Member Burke
(Coauthor: Assembly Member Bonta)

February 21, 2019


An act to add Chapter 2.17 (commencing with Section 1339.85) to Division 2 of the Health and Safety Code, relating to hospitals.


LEGISLATIVE COUNSEL'S DIGEST


AB 962, as amended, Burke. Hospitals: procurement contracts: disclosures.
Existing law provides for the licensure and regulation of requires the State Department of Public Health to license and regulate health care facilities, including hospitals, by the State Department of Public Health. hospitals. Existing law establishes the Office of Statewide Health Planning and Development, which is vested with all the duties, powers, purposes, responsibilities, and jurisdiction of the State Department of Public Health relating to health planning and research development.
This bill would require a licensed hospital with operating expenses of $25,000,000 or more to annually submit a report to the office on its minority, women, LGBT, and veteran-owned business enterprise procurement efforts, as specified. The bill would require each report to be submitted on July 1, 2020, and then annually thereafter. The bill would impose specified civil penalties for a failure to submit that report, as specified. report. The bill would require the office to maintain a link on the office’s internet website that provides public access to the content of those reports, as specified.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Chapter 2.17 (commencing with Section 1339.85) is added to Division 2 of the Health and Safety Code, to read:
CHAPTER  2.17. Hospital procurement contracts: disclosures

1339.85.
 The Legislature finds and declares all of the following:
(a) It is in the state’s interest to encourage competitive business opportunities for all of its people. Hospitals are uniquely positioned to build relationships within the communities they serve through the development, inclusion, and utilization of certified minority, women, lesbian, gay, bisexual, transgender (LGBT), and veteran-owned business enterprises whenever possible. National companies are able to leverage buying power to save costs to the benefit of patients.
(b) By providing that each major hospital submit to the Office of Statewide Health Planning and Development a report explaining the hospital’s supplier diversity statement and expressing its goals regarding certified minority, women, LGBT, and veteran-owned business enterprises, and the office placing that information on the office’s internet website, that online resource will help facilitate these supplier relationships.

1339.86.
 For the purposes of this chapter, the following definitions apply:
(a) “Control” means to exercise the power to make policy decisions.
(b) “LGBT business enterprise” means at least 51 percent of a business is owned by a lesbian, gay, bisexual, or transgender person or persons and whose management and daily operations are controlled by one or more of those individuals.
(c) “Minority business enterprise” means a business enterprise, physically located in the United States or its trust territories, that is at least 51 percent owned by a minority group or groups, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more minority groups, and whose management and daily business operations are controlled by one or more of those individuals. “Minority” includes African Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans who provide proof of United States citizenship or legal resident alien status.
(d) “Office” means the Office of Statewide Health Planning and Development.
(e) “Operate” means to be actively involved in the day-to-day management of the enterprise and not to be merely officers or directors.
(f) “Veteran-owned business enterprise” means a business enterprise, physically located in the United States or its trust territories, that is at least 51 percent owned by one or more veteran groups or, in the case of a publicly owned business, at least 51 percent of the stock of which is owned by one or more veteran groups, and whose management and daily business operations are controlled by one or more of those individuals.
(g) “Women business enterprise” means a business enterprise physically located in the United States or its trust territories, that is at least 51 percent owned by a woman or women, or, in the case of any publicly owned business at least 51 percent of the stock of which is owned by one or more women, and whose management and daily business operations are controlled by one or more of those individuals, who provide proof of United States citizenship or legal resident alien status.

1339.87.
 (a) (1) By July 1, 2020, each licensed hospital, with operating expenses of twenty-five million dollars ($25,000,000) or more, shall submit a report to the office on its minority, women, LGBT, and veteran-owned business enterprise procurement efforts during the previous year.
(2) The report shall include all of the following:
(A) The hospital’s supplier diversity policy statement.
(B) The hospital’s outreach and communications to minority, women, LGBT, and veteran-owned business enterprises, including:
(i) How the hospital encourages and seeks out minority, women, LGBT, and veteran-owned business enterprises to become potential suppliers.
(ii) How the hospital encourages its employees involved in procurement to seek out minority, women, LGBT, and veteran-owned business enterprises to become potential suppliers.
(iii) How the hospital conducts outreach and communication to minority, women, LGBT, and veteran-owned business enterprises.
(iv) How the hospital supports organizations that promote or certify minority, women, LGBT, and veteran-owned business enterprises.
(v) Information regarding appropriate contacts at the hospital for interested business enterprises.
(C) The report shall include information about which procurements are made from minority, women, LGBT, and veteran-owned business enterprises with at least a majority of the enterprise’s workforce in California, with each category aggregated separately, to the extent that information is readily accessible. A hospital may also include other relevant information in the report.
(3) A hospital that does not enter into contracts to procure goods or services in California satisfies the requirements of paragraph (2) by filing a statement with the office attesting that it does not enter into procurement contracts in California.
(b) Nothing in this This section shall not be construed to require quotas, set-asides, or preferences in a licensed hospital’s procurement of goods or services, nor does this section apply to hospital producer or licensee contracts. Licensed hospitals retain the authority to use business judgment to select the supplier for a particular contract.
(c) Failure to file the report required by subdivision (a) or (d), (d) shall subject the licensed hospital to a civil penalty to be fixed by the office, not to exceed ten thousand dollars ($10,000), or if the act or practice was willful, a civil penalty not to exceed twenty thousand dollars ($20,000). of one hundred dollars ($100) per day. A hospital may request, and the office may grant, a 30-day extension to file the report if needed due to unintended or unforeseen delays. If the hospital has failed to file the report within 30 days of a written notice by the office that the hospital has failed to file the report, the office may find that the failure to file the report was willful and increase the civil penalty to an amount not to exceed twenty thousand dollars ($20,000). The penalty imposed by this section shall be enforced by the office and is appealable by means of any remedy provided by Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision is the sole means for enforcement of this section.
(d) On and after July 1, 2020, each licensed hospital specified in subdivision (a) shall annually update its supplier diversity report and submit the new report to the office no later than July 1 of that year.
(e) By July 31, 2020, the office shall establish and maintain a link on the office’s internet website that provides public access to the contents of each licensed hospital’s report on minority, women, LGBT, and veteran-owned business enterprise procurement efforts. The office shall include a statement on the office’s internet website that the information contained in the hospital’s report on minority, women, LGBT, and veteran-owned business enterprises is provided for informational purposes only.