Health and Safety Code § 1339.87

(a)(1) By July 1, 2025, and annually, by July 1 thereafter, each licensed hospital with operating expenses of fifty million dollars ($50,000,000) or more, and each licensed hospital with operating expenses of twenty-five million dollars ($25,000,000) or more that is part of a hospital system shall submit to the department a plan for increasing procurement from minority, women, LGBT, and disabled veteran business tier 1 and tier 2 enterprises.

(2)The plan shall include all of the following:

(A)The

hospital’s supplier diversity policy statement.

(B)Short- and long-term goals and timetables, but not quotas, for increasing procurement from minority, women, LGBT, and disabled veteran business enterprises.

(C)The hospital’s outreach and communications to minority, women, LGBT, and disabled veteran business enterprises, including all of the following:

(i)The methods in which the hospital encourages and seeks out both prime suppliers and subcontract suppliers from minority, women, LGBT, and disabled veteran business enterprises to become potential suppliers.

(ii) The methods in which the hospital encourages its employees involved in procurement to seek out

minority, women, LGBT, and disabled veteran business enterprises to become potential suppliers.

(iii) The methods in which the hospital conducts outreach and

communication to minority, women, LGBT, and disabled veteran business enterprises.

(iv) The methods in which the hospital supports, partners with, or interacts with organizations and other entities in the procurement ecosystem that promote, certify, or contract with minority, women, LGBT, and disabled veteran business enterprises.

(v)The methods in which the hospital resolves any issues that may limit or impede an enterprise from becoming a supplier.

(vi) Information regarding appropriation contacts at the hospital for interested business enterprises, including the contact information of a diverse business outreach liaison and a description of the hospital’s procurement process.

(D) (i) The hospital’s procurements that are made from minority, women, LGBT, and disabled veteran 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.

(ii) A hospital that is part of a hospital system or is organized within a regional network within a hospital system may report the diversity of its procurement in compliance with this subparagraph from a systemwide or regional network level if there are suppliers that provide services or goods to all hospitals within the hospital system or regional network. A hospital shall report the diversity of the remainder of its procurement, including the suppliers that do not resource the

entire hospital system or regional network, as an individual hospital.

(E) The planned and past implementation of relevant recommendations made by the hospital diversity commission, as described in paragraph (1) of subdivision (d) of Section 1339.88.

(3)The plan may include other relevant information.

(b)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 plan

required by subdivision (a) shall subject the licensed hospital to a civil penalty of one hundred dollars ($100) per day. A hospital may request, and the department may grant, a 30-day extension to file the plan if needed due to unintended or unforeseen delays. The penalty imposed by this section shall be enforced by the department and is appealable by means of any remedy provided by Sections 128770 and 128775. This subdivision is the sole means for enforcement of this section.

(d)The department shall establish and maintain a link on the department’s internet website that provides public access to the contents of each licensed hospital’s plan on minority, women, LGBT, and disabled veteran business enterprise procurement efforts. The department shall

include a statement on the department’s internet website that the information contained in the hospital’s plan on minority, women, LGBT, and disabled veteran business enterprises is provided for informational purposes only.

(e)The Legislature finds and declares that each licensed hospital and hospital that is part of a hospital system that is not required to submit a plan pursuant to subdivision (a) is encouraged to voluntarily adopt a plan for increasing procurement from minority, women, LGBT, and disabled veteran business enterprises.

(f)The department may review the plans described in this section for completeness.

(g)The department, in consultation with the hospital diversity commission, shall establish guidelines

for hospitals to voluntarily utilize when pursuing procurement efforts, activities, or programs in accordance with this chapter.

(h)This section shall become operative on January 1, 2025.