Monitoring the Session

HB 5545

LaHood Bill Treats Opt-Out Employers’ Wage Replacement As Workers’ Comp

Did not pass

Verdict: Smells

SmellsNeeds review
Rep. Marc LaHoodRHouse 121
Why it's charged
Carve-out

THE TEXT

…“not carry workers' compensation insurance to an employee who is”…

Bill text, introduced version (I)

The tax-favored treatment goes only to benefit plans run by employers who opted out of workers' compensation. The caption speaks generally about wage replacement benefits and does not name that group, though the benefit is narrow and fits the caption's subject.

Carve-out

Needs review · Nov 1, 2026 · Headline, summary and grade are analysis of the bill text, not a finding about any person · How we grade

Caption

relating to the consideration of wage replacement benefits in the nature of workers' compensation.

Caption from analyzed text · version I.

Summary

Only for employers without workers’ compensation insurance. The stated goal: keep them out of federal taxable income.

The bill says that wage replacement disability benefits are treated as payments under a workers' compensation-type law when they are paid by an employer that does not carry workers' compensation insurance to a worker hurt on the job. It touches Texas employers that opt out of workers' compensation and the injured employees who get these benefits. The stated goal is to keep those payments out of taxable income for federal income and employment tax purposes, starting September 1, 2025.

Labels

Labels: STALLED AFTER COMMITTEE. Voted out of the House Trade, Workforce & Economic Development committee 10-0 on May 2, 2025. Placed on the General State Calendar on May 13, 2025. The bill died.

Receipt

The receipt

89R-HB5545 · 2025-03-14

SOLD BY

Rep. Marc LaHoodRHouse 121

ITEM

relating to the consideration of wage replacement benefits in the nature of workers' compensation.

WHAT IT DOES

Only for employers without workers’ compensation insurance. The stated goal: keep them out of federal taxable income.

The bill says that wage replacement disability benefits are treated as payments under a workers' compensation-type law when they are paid by an employer that does not carry workers' compensation insurance to a worker hurt on the job. It touches Texas employers that opt out of workers' compensation and the injured employees who get these benefits. The stated goal is to keep those payments out of taxable income for federal income and employment tax purposes, starting September 1, 2025.

CHARGES

[x] CARVE-OUTanalysis confidence 40%

THE TEXT

…“not carry workers' compensation insurance to an employee who is”…

Bill text, introduced version (I)

The tax-favored treatment goes only to benefit plans run by employers who opted out of workers' compensation. The caption speaks generally about wage replacement benefits and does not name that group, though the benefit is narrow and fits the caption's subject.

TOTAL

No significant fiscal implication to the State is anticipated.

LBB estimate · fiscal note version H · source

Sources

Fiscal note · version H · May 6, 2025

No first-year general revenue figure available here.

LBB published estimates · flow over the stated periods.

Source snapshot 2026-10-19, Central time.

HISTORY

  1. Filed
  2. Read first time
  3. Referred to s/c on Workforce by Speaker
  4. Scheduled for public hearing in s/c on . . .
  5. Considered by s/c in public hearing
  6. Committee substitute considered in s/c
  7. Testimony taken/registration(s) recorded in subcommittee
  8. Left pending in subcommittee
  9. Recalled from subcommittee
  10. Considered in formal meeting
  11. Committee substitute considered in committee
  12. Reported favorably as substituted
  13. Comte report filed with Committee Coordinator
  14. Committee report distributed
  15. Committee report sent to Calendars
  16. Considered in Calendars
  17. Placed on General State Calendar
FILED UNDER

Beats not yet reviewed.

Smells

THANK YOU FOR CHECKING THE RECEIPT

CAMPAIGN PAID FOR BY

CAMPAIGN PAID FOR BY

Marc LaHood

Donors

Texas Trial Lawyers Association PAC$785KTexans for Truth and Liberty PAC$442KTexas Conservative Majority PAC$406K

Not tied to this bill.

Sources

The author's campaign account only. Own money and internal transfers are separate on the member page.

Derived itemized flow · Oct 28, 2024 to Oct 23, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Texas Trial Lawyers Association PAC$785,000.09

Texas Trial Lawyers Association PAC

$785,000.09

Cash
$460,000.00
Paid by others
$325,000.09
Total
$785,000.09
mail $170,572.09media $154,428.00

Also funds 137 other sitting lawmakers.

Derived recipient stock · Jul 24, 2024 to Oct 23, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Dec 13, 2024 to Oct 19, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 100982916, 101009926, 101022768, 101036215, 101040233, 101058924, 101069186, 101072224.

Texans for Truth and Liberty PAC$442,000.00

Texans for Truth and Liberty PAC

$442,000.00

Cash
$442,000.00
Paid by others
$0.00
Total
$442,000.00

Also funds 44 other sitting lawmakers.

Derived recipient stock · Jun 24, 2025 to Oct 23, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Jun 29, 2025 to Aug 25, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 101009926, 101040233, 101069186.

Texas Conservative Majority PAC$406,000.00

Texas Conservative Majority PAC

$406,000.00

Cash
$100,000.00
Paid by others
$306,000.00
Total
$406,000.00
canvassing $231,000.00advertising $75,000.00

Also funds 42 other sitting lawmakers.

Derived recipient stock · Jan 23, 2026 to Oct 23, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Sep 8, 2026 to Oct 23, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 101069186, 101072224.

Money

Missing data does not establish zero giving. Display amounts are rounded.

×

Texas Trial Lawyers Association PAC

$785,000.09

Cash
$460,000.00
Paid by others
$325,000.09
Total
$785,000.09
mail $170,572.09media $154,428.00

Also funds 137 other sitting lawmakers.

Derived recipient stock · Jul 24, 2024 to Oct 23, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Dec 13, 2024 to Oct 19, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 100982916, 101009926, 101022768, 101036215, 101040233, 101058924, 101069186, 101072224.

×

Texans for Truth and Liberty PAC

$442,000.00

Cash
$442,000.00
Paid by others
$0.00
Total
$442,000.00

Also funds 44 other sitting lawmakers.

Derived recipient stock · Jun 24, 2025 to Oct 23, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Jun 29, 2025 to Aug 25, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 101009926, 101040233, 101069186.

×

Texas Conservative Majority PAC

$406,000.00

Cash
$100,000.00
Paid by others
$306,000.00
Total
$406,000.00
canvassing $231,000.00advertising $75,000.00

Also funds 42 other sitting lawmakers.

Derived recipient stock · Jan 23, 2026 to Oct 23, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Sep 8, 2026 to Oct 23, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 101069186, 101072224.

Votes

No floor vote loaded for this bill.

Witnesses11
For
6
Against
4
On
1
Names

For

  • Owner/Operator Services Inc.1 registration
  • Self1 registration
  • Self; Association for Responsible Alternatives to Workers Compensation1 registration
  • Self; Texas Trucking Association1 registration
  • Texas Retailers Association1 registration
  • Walmart1 registration

Against

  • Self; Every Texan (formerly CPPP)1 registration
  • Self; TSEU1 registration
  • Texas AFL-CIO1 registration
  • Texas Mutual Insurance Company1 registration

On

  • TDI, Division of Workers’ Compensation1 registration
Sources

11 parsed registrations across the loaded witness lists.

Derived stock of witness registrations. Repeated appearances count separately. Organizations and self-representation appear as printed.

House witness list. Source snapshot 2026-10-20, Central time.

Fiscal

No significant fiscal implication to the State is anticipated.

LBB estimate · fiscal note version H · source

Sources

Fiscal note · version H · May 6, 2025

No first-year general revenue figure available here.

LBB published estimates · flow over the stated periods.

Source snapshot 2026-10-19, Central time.

How this was graded

Analysis of text version I by claude-opus-5-5, Oct 19, 2026, against the published rubric.

Sources

Texas House · Filed Mar 14, 2025

05/13/2025 H Placed on General State Calendar

Texas Legislature Online · Introduced · House Committee Report

Data snapshot Nov 1, 2026 at 1:59 PM CST. Grades, charges, quotes and corrections follow the published record.

House committee · Trade, Workforce & Economic Development · Committee vote 10 aye, 0 nay, 1 absent · Out of committee

Companion

SB 2989 by Schwertner (identical)

Subjects

Disabilities, Persons with

Labor--Wages

Labor--Workers' Compensation

EMPLOYEE BENEFITS & LEAVE

Text

The text as introduced · 180 words

89R19198 TYPED

By: LaHood
H.B. No. 5545

A BILL TO BE ENTITLED

AN ACT

relating to the consideration of wage replacement benefits in the

nature of workers' compensation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter A, Chapter 406, Labor Code, is

amended by adding Section 406.0025 to read as follows:

Sec. 406.0025. CONSIDERATION OF WAGE REPLACEMENT BENEFITS

IN THE NATURE OF WORKERS' COMPENSATION.

Wage replacement disability benefits paid by an employer that does

not carry workers' compensation insurance to an employee who is

unable to return to work due to an injury in the course and scope of

employment are considered payments made under a statute in the

nature of a workers' compensation statute solely for the purpose of

being excluded from taxable income for federal income and

employment tax purposes.

SECTION 2. The enactment of this Act is a clarification of

existing law and does not imply that existing law may be construed

as inconsistent with the law as amended by this Act.

SECTION 3. This Act takes effect September 1, 2025.