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Signed Into Law
Signed June 20, 2025Effective 2026-01-01
SB1455

Regular Session

Relating to the funding mechanism for the regulation of workers' compensation and workers' compensation insurance; authorizing surcharges.

Government Affairs & Regulatory Compliance Analysis

SB1455: Government Affairs Overview

SB1455 abolishes the Workers' Compensation Maintenance Tax and replaces it with a "Regulatory Surcharge" effective January 1, 2026. This statutory reclassification alters tax liability structures for insurers—specifically excluding the fee from retaliatory tax calculations—and explicitly authorizes carriers to pass the cost (capped at 2. 7% of gross premiums) directly to policyholders.

Sen. Brent Hagenbuch·Senate Bill·Regular Session

Moderate
Low Cost
Effective:2026-01-01
Enforcing Agencies

Comptroller of Public Accounts • Division of Workers' Compensation (DWC) • Texas Department of Insurance (TDI)

Business Impact

Who SB1455 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2026-01-01). Consider how these changes may affect your operations.

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Banking & Finance

Affected business types:

  • Banks
  • Credit unions
  • Financial services firms
  • Insurance companies
View all banking & finance legislation

Key Operational Considerations

  • 1Insurers: Review policy templates immediately. Ensure "Taxes and Fees" provisions are broad enough to capture "regulatory surcharges" to facilitate the pass-through authorized by Sec. 255.005.
  • 2Tax & Accounting Teams: Staff must be trained to recode payments from "Maintenance Tax" to "Surcharge" in accounts payable systems.
  • 3Compliance Officers: No new certifications required, but staff must understand the distinction for accurate financial reporting to the Comptroller.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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SB1455
Moderate
Relating to the funding mechanism for the regulation of workers' compensation and workers' compensation insurance; authorizing surcharges.
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2026-01-01
Enforcing Agencies
Comptroller of Public AccountsDWCTDI
Primary Author: Sen. Brent Hagenbuch
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: January 1, 2026
  • Compliance Deadline: January 1, 2026 (Billing systems must be live to capture surcharges on new premiums/liabilities). First reporting due dates will follow the standard Comptroller schedule in 2027.
  • Agency Rulemaking: The Commissioner of Insurance must certify the surcharge rate annually. We anticipate Texas Department of Insurance (TDI) rulemaking in late 2024 or 2025 to define billing transparency requirements and transition rules for policies spanning the effective date.

Immediate Action Plan

  • 1. Tax Impact Analysis (Immediate): Carriers must calculate the projected impact of the retaliatory tax change. This may materially affect the cost of doing business in Texas for non-domiciled insurers.
  • 2. Update Billing Logic (2025): Reconfigure software to stop accruing "Maintenance Tax" and start accruing "Surcharge" at 12:00 AM on Jan 1, 2026.
  • 3. Revise Policy Language (2025): Amend standard policy forms to explicitly reference the surcharge pass-through to avoid contract disputes with policyholders.
  • 4. Monitor Rate Certification (Late 2025): Watch for the Commissioner’s rate certification 45 days prior to the due date to finalize accrual rates.

Operational Changes Required

Contracts

  • Insurers: Review policy templates immediately. Ensure "Taxes and Fees" provisions are broad enough to capture "regulatory surcharges" to facilitate the pass-through authorized by Sec. 255.005.
  • Employers (Policyholders): Review renewal agreements for terms extending past Jan 1, 2026. Negotiate whether the 2.7% surcharge will be included in the rate or added as a separate line item, which affects your bottom-line cost.

Hiring/Training

  • Tax & Accounting Teams: Staff must be trained to recode payments from "Maintenance Tax" to "Surcharge" in accounts payable systems.
  • Compliance Officers: No new certifications required, but staff must understand the distinction for accurate financial reporting to the Comptroller.

Reporting & Record-Keeping

  • Dual Reporting Systems: For the 2026-2027 transition, you must maintain the ability to report under the *old* maintenance tax system for tail liabilities incurred prior to Jan 1, 2026, while simultaneously reporting new liabilities under the surcharge system.
  • New Forms: Expect new remittance forms from the Comptroller.
  • Retaliatory Tax Calculations: Non-Texas domiciled carriers must adjust tax formulas. This surcharge is excluded from retaliatory tax calculations, potentially increasing your total tax burden in Texas.

Fees & Costs

  • Surcharge Cap: The aggregate rate remains capped at 2.7% of gross premiums.
  • Semiannual Trigger: If your surcharge liability exceeds $2,000 in the previous year, you are legally required to remit payments semiannually rather than annually.

Strategic Ambiguities & Considerations

  • Line-Item Transparency: The law authorizes passing the cost to policyholders but does not dictate *how* it appears on the invoice. TDI may issue future rules requiring specific disclosure language to prevent consumer confusion.
  • Transition Accounting: The statute applies to premiums for "annual periods beginning on or after" Jan 1, 2026. It is currently unclear how TDI will treat multi-year policies or policies with effective dates prior to Jan 1 that have premium installments due in 2026.
  • Interstate Disputes: Other states may challenge the exclusion of this surcharge from retaliatory tax calculations. Legal counsel should prepare for potential friction with foreign jurisdictions regarding the classification of this fee.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 19, 2025
Passed Senate
Apr 24, 2025
Passed House
May 21, 2025
Signed
Jun 20, 2025
Effective
Jan 1, 2026
TopicsInsuranceInsurance--property & CasualtyLaborLabor--workers' CompensationTaxationTaxation--generalFees & Other Nontax RevenueFees & Other Nontax Revenue--stateInsurance, Commissioner ofInsurance, Texas Department ofInsurance--insurers & AgentsState FinancesState Finances--management & ControlComptroller of Public Accounts
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Senate Authors

Sen. Brent HagenbuchRepublican · Primary Author

House Sponsor

Rep. Cole HefnerRepublican · Primary Sponsor

Bill Text(with markup)

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Quick Reference

Frequently Asked Questions

Common questions about SB1455

Q

What does Texas SB1455 do?

SB1455 abolishes the Workers' Compensation Maintenance Tax and replaces it with a "Regulatory Surcharge" effective January 1, 2026. This statutory reclassification alters tax liability structures for insurers—specifically excluding the fee from retaliatory tax calculations—and explicitly authorizes carriers to pass the cost (capped at 2. 7% of gross premiums) directly to policyholders.

Q

Who authored SB1455?

SB1455 was authored by Texas Senator Brent Hagenbuch during the Regular Session.

Q

When was SB1455 signed into law?

SB1455 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB1455?

SB1455 is enforced by Comptroller of Public Accounts, Division of Workers' Compensation (DWC) and Texas Department of Insurance (TDI).

Q

How significant are the changes in SB1455?

The regulatory priority for SB1455 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB1455?

The cost impact of SB1455 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB1455 address?

SB1455 addresses topics including insurance, insurance--property & casualty, labor, labor--workers' compensation and taxation.

Q

What are the key dates for SB1455?

Key dates for SB1455: Effective date is 2026-01-01. Consult with legal counsel regarding applicability.

Q

What are the penalties under SB1455?

SB1455 establishes the following penalties: administrative penalty of Unspecified (subject to standard TDI administrative violation penalties) for Failure by a certified self-insurer to pay the regulatory fee and surcharge in a timely manner (Sec. 407.104).; administrative penalty of Unspecified (subject to standard TDI administrative violation penalties) for Failure by a self-insurance group to pay the required surcharges in a timely manner (Sec. 407A.303).. Consult with legal counsel for specific applicability to your situation.

Q

Which Texas businesses are affected by SB1455?

SB1455 primarily affects insurance companies and financial institutions, property owners and real estate professionals, employers and workforce development organizations. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026