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

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.