Substitute House Bill No. 5316, effective October 1, 2026, prohibits real estate investment trusts (REITs) from acquiring or increasing operational control over hospitals and health systems. The bill defines "operational control" as the ability to influence or direct actions or policies of a hospital or health system, or to appoint or terminate individuals involved in their operational oversight. Additionally, the bill prohibits hospitals and health systems from entering into sale-leaseback transactions, which involve selling and leasing back real property that constitutes the main campus of a hospital.

The bill incorporates the definition of a REIT from the federal Internal Revenue Code and aims to safeguard the operational integrity of hospitals and health systems from external financial influences. The legislation is designed to ensure that hospitals maintain full governance over their operations and assets, thereby protecting patient care and clinical decision-making from potential conflicts of interest associated with REITs. There is no anticipated fiscal impact on the state or municipalities as a result of this bill.