Senate advances bill letting rural hospitals file for reorganization bankruptcy without county-wide filing

Cheyenne — The Senate committee of the whole on Feb. 13 recommended Senate File 5, a bill that would let county memorial hospitals and hospital districts file chapter 9 reorganization bankruptcy on their own rather than requiring a county‑level filing.

Sponsor Senator Crum said the change is intended to protect rural hospitals that face financial distress by allowing them to reorganize their debts while remaining open. "They can file reorganization bankruptcy on their own," Crum said, adding that the move gives trustees — who are appointed by county commissioners under existing law — the authority to pursue reorganization without forcing the county itself into bankruptcy.

Floor questions focused on governance and county authority. Senator Cole asked how the process would work and whether it circumvents county commissioners; Crum and other supporters said trustees are appointed by commissioners and that counties remain owners, while the bill merely allows a hospital entity to use established reorganization mechanisms.

The committee adopted a standing committee amendment changing the bill’s effective date from July 1 to immediate effect upon enactment so eligible hospitals could use the statute as soon as the governor signs it. Supporters said the provision grew from interim work and requests from county commissioners and the Wyoming Hospital Association.

What happens next: The committee recommended SF5 do pass; the bill will proceed through the Senate’s remaining steps. If enacted and signed, eligible memorial and district hospitals could pursue chapter 9 reorganization immediately under the committee amendment.