Texas 2025 - 89th Regular

Texas House Bill HB4483 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R2192 RDR-F
2	2	By: Hefner H.B. No. 4483
3	3
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5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the funding mechanism for the regulation of workers'
10	10	compensation and workers' compensation insurance; authorizing
11	11	surcharges.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. The heading to Title 3, Insurance Code, is
14	14	amended to read as follows:
15	15	TITLE 3. DEPARTMENT FUNDS, FEES, SURCHARGES, AND TAXES
16	16	SECTION 2. The heading to Subtitle C, Title 3, Insurance
17	17	Code, is amended to read as follows:
18	18	SUBTITLE C. INSURANCE MAINTENANCE TAXES AND SURCHARGES
19	19	SECTION 3. Section 201.001(a), Insurance Code, is amended
20	20	to read as follows:
21	21	(a) The Texas Department of Insurance operating account is
22	22	an account in the general revenue fund. The account includes the
23	23	following:
24	24	(1) taxes, surcharges, and fees received by the
25	25	commissioner or comptroller that are required by this code or other
26	26	law to be deposited to the credit of the account; and
27	27	(2) money or credits received by the department or
28	28	commissioner from sales, reimbursements, and fees authorized by law
29	29	other than this code, including money or credits received from:
30	30	(A) charges for providing copies of public
31	31	information under Chapter 552, Government Code;
32	32	(B) the disposition of surplus or salvage
33	33	property under Subchapters C and D, Chapter 2175, Government Code;
34	34	(C) the sale of publications and other printed
35	35	material under Section 2052.301, Government Code;
36	36	(D) miscellaneous transactions and sources under
37	37	Section 403.011 or 403.012, Government Code;
38	38	(E) charges for postage spent to serve legal
39	39	process under Section 17.025, Civil Practice and Remedies Code;
40	40	(F) the comptroller involving warrants for which
41	41	payment is barred under Chapter 404, Government Code;
42	42	(G) sales or reimbursements authorized by the
43	43	General Appropriations Act; and
44	44	(H) the sale of property purchased with money
45	45	from the account or a predecessor fund or account.
46	46	SECTION 4. Section 251.001(a), Insurance Code, is amended
47	47	to read as follows:
48	48	(a) The commissioner shall annually determine the rate of
49	49	assessment of each maintenance tax or workers' compensation
50	50	surcharge imposed under this subtitle.
51	51	SECTION 5. Section 251.002, Insurance Code, is amended to
52	52	read as follows:
53	53	Sec. 251.002. DUTY TO ADVISE COMPTROLLER OF RATE. The
54	54	commissioner shall advise the comptroller of the applicable rate of
55	55	assessment of a maintenance tax or workers' compensation surcharge
56	56	not later than the 45th day before the due date of the tax or
57	57	surcharge report for the period for which that tax or surcharge is
58	58	due.
59	59	SECTION 6. Section 251.003, Insurance Code, is amended to
60	60	read as follows:
61	61	Sec. 251.003. EFFECT OF LATE ADVISEMENT OF
62	62	RATE. (a) Except as provided by Subsection (b), if the
63	63	commissioner does not advise the comptroller of the applicable rate
64	64	of assessment of a maintenance tax or workers' compensation
65	65	surcharge by the date required by Section 251.002, the rate of
66	66	assessment is the rate applied in the previous tax or surcharge
67	67	period.
68	68	(b) If the commissioner advises the comptroller of the
69	69	applicable rate of assessment of a maintenance tax or workers'
70	70	compensation surcharge after the tax or surcharge has been
71	71	assessed, the comptroller shall:
72	72	(1) advise each taxpayer or surcharge payer in writing
73	73	of the amount of any additional taxes or surcharges due; or
74	74	(2) refund any excess taxes or surcharges paid.
75	75	SECTION 7. The heading to Section 251.004, Insurance Code,
76	76	is amended to read as follows:
77	77	Sec. 251.004. DEPOSIT OF MAINTENANCE TAXES AND SURCHARGES.
78	78	SECTION 8. Section 251.004(a), Insurance Code, is amended
79	79	to read as follows:
80	80	(a) Except as provided by Subsection (b), maintenance taxes
81	81	collected under this subtitle and surcharges collected under
82	82	Chapter 255 shall be deposited in the general revenue fund and
83	83	reallocated to the Texas Department of Insurance operating account.
84	84	SECTION 9. Chapter 255, Insurance Code, is amended to read
85	85	as follows:
86	86	CHAPTER 255. WORKERS' COMPENSATION INSURANCE
87	87	Sec. 255.001. SURCHARGE [MAINTENANCE TAX] IMPOSED. (a) A
88	88	surcharge [maintenance tax] is imposed on each authorized insurer
89	89	with gross premiums subject to the surcharge [taxation] under
90	90	Section 255.003, including a:
91	91	(1) stock insurance company;
92	92	(2) mutual insurance company;
93	93	(3) reciprocal or interinsurance exchange; and
94	94	(4) Lloyd's plan.
95	95	(b) The surcharge [tax] required by this chapter is in
96	96	addition to [other] taxes or other surcharges imposed that are not
97	97	in conflict with this chapter.
98	98	Sec. 255.002. MAXIMUM RATE; ANNUAL ADJUSTMENT. (a) The
99	99	sum of the rates [rate] of assessment for the surcharge imposed by
100	100	this chapter and the surcharges imposed by Chapters 403 and 405,
101	101	Labor Code, set by the commissioner, may not exceed 2.7 [0.6]
102	102	percent of the gross premiums subject to surcharges [taxation under
103	103	Section 255.003].
104	104	(b) The commissioner shall annually adjust the rate of
105	105	assessment of the surcharge [maintenance tax] so that the surcharge
106	106	[tax] imposed that year, together with any unexpended funds
107	107	produced by the surcharge [tax], produces the amount the
108	108	commissioner determines is necessary to pay the expenses during the
109	109	succeeding year of regulating workers' compensation insurance.
110	110	Sec. 255.003. PREMIUMS SUBJECT TO SURCHARGE [TAXATION].
111	111	(a) An insurer shall pay the surcharge [maintenance taxes] under
112	112	this chapter on the correctly reported gross workers' compensation
113	113	insurance premiums from writing workers' compensation insurance in
114	114	this state, including the modified annual premium of a policyholder
115	115	that purchases an optional deductible plan under Subchapter E,
116	116	Chapter 2053.
117	117	(b) The rate of assessment for a surcharge shall be applied
118	118	to the modified annual premium before application of a deductible
119	119	premium credit.
120	120	Sec. 255.004. SURCHARGE [MAINTENANCE TAX] DUE DATES. (a)
121	121	The insurer shall pay the surcharge [maintenance tax] annually or
122	122	semiannually.
123	123	(b) The comptroller may require semiannual payment only
124	124	from an insurer whose surcharge [maintenance tax] liability under
125	125	this chapter for the previous surcharge [tax] year was at least
126	126	$2,000.
127	127	Sec. 255.005. RECOVERY OF SURCHARGE. An insurer may
128	128	recover a surcharge under this chapter by:
129	129	(1) reflecting the surcharge as an expense in a rate
130	130	filing required under this code; or
131	131	(2) charging the insurer's policyholders.
132	132	SECTION 10. Section 402.076(b), Labor Code, is amended to
133	133	read as follows:
134	134	(b) The operations of the division under this section are
135	135	funded through the surcharge [maintenance tax] assessed under
136	136	Section 403.002.
137	137	SECTION 11. Section 403.001(a), Labor Code, is amended to
138	138	read as follows:
139	139	(a) Except as provided by Sections 403.006, 403.007, and
140	140	403.008, or as otherwise provided by law, money collected under
141	141	this subtitle, including surcharges and advance deposits for
142	142	purchase of services, shall be deposited in the general revenue
143	143	fund of the state treasury to the credit of the Texas Department of
144	144	Insurance operating account.
145	145	SECTION 12. Section 403.002, Labor Code, is amended to read
146	146	as follows:
147	147	Sec. 403.002. SURCHARGES [MAINTENANCE TAXES]. (a) Each
148	148	insurance carrier, other than a governmental entity, shall pay an
149	149	annual surcharge [maintenance tax] to pay the costs of
150	150	administering this subtitle and to support the prosecution of
151	151	workers' compensation insurance fraud in this state.
152	152	(b) The rate of assessment is applied to [may not exceed an
153	153	amount equal to two percent of] the correctly reported gross
154	154	workers' compensation insurance premiums, including the modified
155	155	annual premium of a policyholder that purchases an optional
156	156	deductible plan under Subchapter E, Chapter 2053 [Article 5.55C],
157	157	Insurance Code. The rate of assessment shall be applied to the
158	158	modified annual premium before application of a deductible premium
159	159	credit.
160	160	(c) A workers' compensation insurance company is assessed
161	161	the surcharge [taxed] at the rate established under Section 403.003
162	162	and as limited by Section 255.002(a), Insurance Code. The
163	163	surcharge [tax] shall be collected in the manner provided for
164	164	collection of other surcharges [taxes] on gross premiums from a
165	165	workers' compensation insurance company as provided in Chapter 255,
166	166	Insurance Code.
167	167	(d) Each certified self-insurer shall pay a fee and
168	168	surcharge [maintenance taxes] as provided by Subchapter F, Chapter
169	169	407.
170	170	SECTION 13. The heading to Section 403.003, Labor Code, is
171	171	amended to read as follows:
172	172	Sec. 403.003. RATE OF SURCHARGE [ASSESSMENT].
173	173	SECTION 14. Section 403.003(a), Labor Code, is amended to
174	174	read as follows:
175	175	(a) The commissioner of insurance shall set and certify to
176	176	the comptroller the rate of the surcharge, [maintenance tax
177	177	assessment] taking into account:
178	178	(1) any expenditure projected as necessary for the
179	179	division and the office of injured employee counsel to:
180	180	(A) administer this subtitle during the fiscal
181	181	year for which the rate of assessment is set; and
182	182	(B) reimburse the general revenue fund as
183	183	provided by Section 201.052, Insurance Code;
184	184	(2) projected employee benefits paid from general
185	185	revenues;
186	186	(3) a surplus or deficit produced by the surcharge
187	187	[tax] in the preceding year;
188	188	(4) revenue recovered from other sources, including
189	189	reappropriated receipts, grants, payments, fees, gifts, and
190	190	penalties recovered under this subtitle; and
191	191	(5) expenditures projected as necessary to support the
192	192	prosecution of workers' compensation insurance fraud.
193	193	SECTION 15. Section 403.004, Labor Code, is amended to read
194	194	as follows:
195	195	Sec. 403.004. COLLECTION OF SURCHARGE [TAX] AFTER
196	196	WITHDRAWAL FROM BUSINESS. The commissioner or the commissioner of
197	197	insurance immediately shall proceed to collect surcharges [taxes]
198	198	due under this chapter from an insurance carrier that withdraws
199	199	from business in this state, using legal process as necessary.
200	200	SECTION 16. Section 403.005, Labor Code, is amended to read
201	201	as follows:
202	202	Sec. 403.005. SURCHARGE [TAX] RATE. The commissioner of
203	203	insurance shall annually adjust the rate of assessment of the
204	204	surcharge [maintenance tax] imposed under Section 403.003 so that
205	205	the surcharge [tax] imposed that year, together with any unexpended
206	206	funds produced by the surcharge [tax], produces the amount the
207	207	commissioner of insurance determines is necessary to pay the
208	208	expenses of administering this subtitle.
209	209	SECTION 17. Chapter 403, Labor Code, is amended by adding
210	210	Section 403.0055 to read as follows:
211	211	Sec. 403.0055. RECOVERY OF SURCHARGE. An insurer may
212	212	recover a surcharge under this chapter by:
213	213	(1) reflecting the surcharge as an expense in a rate
214	214	filing required under the Insurance Code; or
215	215	(2) charging the insurer's policyholders.
216	216	SECTION 18. Section 403.007(e), Labor Code, is amended to
217	217	read as follows:
218	218	(e) If the commissioner determines that the funding under
219	219	Subsection (a) is not adequate to meet the expected obligations of
220	220	the subsequent injury fund established under Section 403.006, the
221	221	fund shall be supplemented by the collection of a surcharge
222	222	[maintenance tax] paid by insurance carriers, other than a
223	223	governmental entity, as provided by Sections 403.002 and 403.003.
224	224	The rate of assessment must be adequate to provide 120 percent of
225	225	the projected unfunded liabilities of the fund for the next
226	226	biennium as certified by an independent actuary or financial
227	227	advisor.
228	228	SECTION 19. The heading to Section 405.003, Labor Code, is
229	229	amended to read as follows:
230	230	Sec. 405.003. FUNDING; SURCHARGE AND RECOVERY OF SURCHARGE
231	231	BY INSURERS [MAINTENANCE TAX].
232	232	SECTION 20. Section 405.003, Labor Code, is amended by
233	233	amending Subsections (a), (b), (c), and (d) and adding Subsection
234	234	(g) to read as follows:
235	235	(a) The group's duties under this chapter are funded through
236	236	the assessment of a surcharge [maintenance tax] collected annually
237	237	from all insurance carriers, and self-insurance groups that hold
238	238	certificates of approval under Chapter 407A, except governmental
239	239	entities.
240	240	(b) The department shall set the rate of the surcharge
241	241	[maintenance tax] based on the expenditures authorized and the
242	242	receipts anticipated in legislative appropriations. The surcharge
243	243	[tax] rate for insurance companies may not exceed the limitation in
244	244	Section 255.002(a), Insurance Code. The surcharge rate is applied
245	245	to [may not exceed one-tenth of one percent of] the correctly
246	246	reported gross workers' compensation insurance premiums. The
247	247	surcharge [tax] rate for certified self-insurers may not exceed the
248	248	limitation in Section 255.002(a), Insurance Code. The surcharge
249	249	rate is applied to [may not exceed one-tenth of one percent of] the
250	250	total surcharge [tax] base of all certified self-insurers, as
251	251	computed under Section 407.103(b). The surcharge [tax] rate for
252	252	self-insurance groups described by Subsection (a) may not exceed
253	253	the limitation in Section 255.002(a), Insurance Code. The
254	254	surcharge rate is applied to [may not exceed one-tenth of one
255	255	percent of] the group's gross premium for the group's retention,
256	256	excluding premium collected by the group for excess insurance.
257	257	(c) The surcharge [tax] imposed under Subsection (a) is in
258	258	addition to all [other] taxes or other surcharges imposed on those
259	259	insurance carriers for workers' compensation purposes.
260	260	(d) The surcharge [tax] on insurance companies and on
261	261	self-insurance groups described by Subsection (a) shall be
262	262	assessed, collected, and paid in the same manner and at the same
263	263	time as the surcharge [maintenance tax] established for the support
264	264	of the department under Chapter 255, Insurance Code. The surcharge
265	265	[tax] on certified self-insurers shall be assessed, collected, and
266	266	paid in the same manner and at the same time as the self-insurer
267	267	surcharge [maintenance tax] collected under Section 407.104.
268	268	(g) An insurer may recover a surcharge under this section
269	269	by:
270	270	(1) reflecting the surcharge as an expense in a rate
271	271	filing required under the Insurance Code; or
272	272	(2) charging the insurer's policyholders.
273	273	SECTION 21. Section 407.103, Labor Code, is amended to read
274	274	as follows:
275	275	Sec. 407.103. SELF-INSURER SURCHARGE [MAINTENANCE TAX];
276	276	EFFECT ON GENERAL SURCHARGE [MAINTENANCE TAX]. (a) Each certified
277	277	self-insurer shall pay a self-insurer surcharge [maintenance tax]
278	278	for the administration of the division and the office of injured
279	279	employee counsel and to support the prosecution of workers'
280	280	compensation insurance fraud in this state. Not more than two
281	281	percent of the total surcharge [tax] base of all certified
282	282	self-insurers, as computed under Subsection (b), may be assessed
283	283	for a surcharge [maintenance tax] under this section.
284	284	(b) To determine the surcharge [tax] base of a certified
285	285	self-insurer for purposes of this chapter, the department shall
286	286	multiply the amount of the certified self-insurer's liabilities for
287	287	workers' compensation claims incurred in the previous year,
288	288	including claims incurred but not reported, plus the amount of
289	289	expense incurred by the certified self-insurer in the previous year
290	290	for administration of self-insurance, including legal costs, by
291	291	1.02.
292	292	(c) The surcharge [tax] liability of a certified
293	293	self-insurer under this section is the surcharge [tax] base
294	294	computed under Subsection (b) multiplied by the rate assessed
295	295	workers' compensation insurance companies under Sections 403.002
296	296	and 403.003, as limited by Section 255.002(a), Insurance Code.
297	297	(d) In setting the rate of the surcharge [maintenance tax
298	298	assessment] for insurance companies, the commissioner of insurance
299	299	may not consider revenue or expenditures related to the operation
300	300	of the self-insurer program under this chapter.
301	301	SECTION 22. Section 407.104, Labor Code, is amended to read
302	302	as follows:
303	303	Sec. 407.104. COLLECTION OF SURCHARGES [TAXES] AND FEES;
304	304	ADMINISTRATIVE VIOLATION. (a) The regulatory fee imposed by
305	305	Section 407.102 and the surcharge [taxes] imposed by Section
306	306	407.103 are due on the 60th day after the issuance of a certificate
307	307	of authority to self-insure and on the 60th day after each annual
308	308	renewal date.
309	309	(b) The department shall compute the fee and surcharge
310	310	[taxes] of a certified self-insurer and notify the certified
311	311	self-insurer of the amounts due. The surcharge [taxes] and fees
312	312	shall be remitted to the division.
313	313	(c) The regulatory fee imposed under Section 407.102 shall
314	314	be deposited in the Texas Department of Insurance operating account
315	315	to the credit of the division. The self-insurer surcharge imposed
316	316	under Section 407.103 [maintenance tax] shall be deposited in the
317	317	Texas Department of Insurance operating account to the credit of
318	318	the division.
319	319	(d) A certified self-insurer commits an administrative
320	320	violation if the self-insurer does not pay the surcharge [taxes]
321	321	and fee imposed under Sections 407.102 and 407.103 in a timely
322	322	manner.
323	323	(e) If the certificate of authority to self-insure of a
324	324	certified self-insurer is terminated, the commissioner or the
325	325	commissioner of insurance shall proceed immediately to collect
326	326	surcharges [taxes] due under this subtitle, using legal process as
327	327	necessary.
328	328	SECTION 23. Section 407A.252(b), Labor Code, is amended to
329	329	read as follows:
330	330	(b) The commissioner has full access to the records,
331	331	officers, agents, and employees of a group as necessary to complete
332	332	an examination under this section. The commissioner may recover the
333	333	expenses of the examination under Sections 401.151 and 401.152
334	334	[Article 1.16], Insurance Code, to the extent the surcharge
335	335	[maintenance tax] under Section 407A.302 does not cover those
336	336	expenses.
337	337	SECTION 24. The heading to Subchapter G, Chapter 407A,
338	338	Labor Code, is amended to read as follows:
339	339	SUBCHAPTER G. TAXES, SURCHARGES [FEES], AND ASSESSMENTS
340	340	SECTION 25. Section 407A.301, Labor Code, is amended to
341	341	read as follows:
342	342	Sec. 407A.301. SURCHARGE [MAINTENANCE TAX] FOR DIVISION AND
343	343	RESEARCH FUNCTIONS OF DEPARTMENT. (a) Each group shall pay a
344	344	self-insurance group surcharge [maintenance tax] under this
345	345	section for:
346	346	(1) the administration of the division of workers'
347	347	compensation of the department;
348	348	(2) the prosecution of workers' compensation insurance
349	349	fraud in this state;
350	350	(3) the research functions of the department under
351	351	Chapter 405; and
352	352	(4) the administration of the office of injured
353	353	employee counsel under Chapter 404.
354	354	(b) The surcharge [tax] liability of a group under
355	355	Subsections (a)(1) and (2) is based on gross premium for that [the]
356	356	group's retention multiplied by the rate assessed insurance
357	357	carriers under Sections 403.002 and 403.003, as limited by Section
358	358	255.002(a), Insurance Code.
359	359	(c) The surcharge [tax] liability of a group under
360	360	Subsection (a)(3) is based on gross premium for the group's
361	361	retention multiplied by the rate assessed insurance carriers under
362	362	Section 405.003, as limited by Section 255.002(a), Insurance Code.
363	363	(d) The surcharge [tax] under this section does not apply to
364	364	premium collected by the group for excess insurance.
365	365	(e) The surcharge [tax] under this section shall be
366	366	collected by the comptroller as provided by Section 201.051 and
367	367	Chapter 255, Insurance Code.
368	368	SECTION 26. Section 407A.302, Labor Code, is amended to
369	369	read as follows:
370	370	Sec. 407A.302. SURCHARGE [MAINTENANCE TAX] FOR DEPARTMENT.
371	371	(a) Subject to Subsection (b), each group shall pay the surcharge
372	372	[maintenance tax] imposed under Chapter 255, Insurance Code, for
373	373	the administrative costs incurred by the department in implementing
374	374	this chapter.
375	375	(b) The surcharge owed by [tax liability of] a group under
376	376	this section is based on gross premium for the group's retention and
377	377	does not include premium collected by the group for excess
378	378	insurance.
379	379	(c) The surcharge owed [maintenance tax assessed] under
380	380	this section is subject to Chapter 255, Insurance Code, and shall be
381	381	collected by the comptroller in the manner provided by that
382	382	chapter.
383	383	SECTION 27. Section 407A.303, Labor Code, is amended to
384	384	read as follows:
385	385	Sec. 407A.303. COLLECTION AND PAYMENT OF SURCHARGES
386	386	[TAXES]. (a) The group shall remit the surcharges [taxes] for
387	387	deposit in the Texas Department of Insurance operating account to
388	388	the credit of the division.
389	389	(b) A group commits an administrative violation if the group
390	390	does not pay the surcharges [taxes] imposed under Sections 407A.301
391	391	and 407A.302 in a timely manner.
392	392	(c) If the certificate of approval of a group is terminated,
393	393	the commissioner or the commissioner of insurance shall immediately
394	394	notify the comptroller to collect surcharges [taxes] as directed
395	395	under Sections 407A.301 and 407A.302.
396	396	SECTION 28. The changes in law made by this Act relating to
397	397	surcharges on gross workers' compensation premiums or certified
398	398	self-insurers' liabilities and expenses apply only to the gross
399	399	annual premiums reported or liabilities and expenses incurred for
400	400	an annual period beginning on or after the effective date of this
401	401	Act. Maintenance taxes imposed on gross annual workers'
402	402	compensation premiums or liabilities and expenses before the
403	403	effective date of this Act are governed by the law as it existed
404	404	before the effective date of this Act, and the former law is
405	405	continued in effect for that purpose.
406	406	SECTION 29. This Act takes effect January 1, 2026.