Committee approves bill allowing hospitals, hospital districts to use reorganization bankruptcy

The Senate Labor and Health committee voted to advance Senate File 5, a bill giving memorial hospitals and hospital districts the ability to seek reorganization bankruptcy to restructure debt without triggering county‑wide bankruptcy proceedings. Senator Crum and hospital association witnesses said the tool is designed to help struggling rural hospitals remain open while they work through financial problems.

Eric Boley of the Wyoming Hospital Association described statewide financial stress: most hospitals operate at a loss and some are in critical condition, he said, and giving hospitals a restructuring option could help them continue serving communities and allow local vendors to be paid while the facility reorganizes. "This is a great tool," Boley said, adding that reorganization is not liquidation.

Committee members discussed governance and timing, including whether filings would require electors’ approval; sponsors said the bill’s structure reflects ownership and governance differences so that a separate elector vote is not required. The committee adopted an amendment making the law effective immediately upon the governor’s signature rather than waiting until July 1, after members argued immediate availability could matter for at‑risk hospitals.

After debate the committee approved the bill by roll call, recorded as five ayes. Senator Crum volunteered to carry the bill to the Senate floor.