Texas House Bill 40 Boosts Statewide Business Courts

News Summary

Texas has passed House Bill 40, lowering the threshold for cases in Business Courts from $10 million to $5 million. This change aims to make these courts more accessible to smaller businesses and expand their jurisdiction to include intellectual property disputes. The bill signals a significant shift in Texas’s business landscape, enhancing its appeal as a location for commercial activities. The Business Courts have already shown promising results, and further reforms may be on the way to streamline operations and promote efficiency.

Texas House Bill 40 Gives a Boost to Statewide Business Courts

If you’re in Texas, you might want to pay attention to the latest happenings around the state’s Business Courts. Just about a year ago, Texas made big strides by launching statewide Business Courts to handle those pesky complex commercial litigations. Fast forward to June 20, 2025, when Governor Abbott signed a new piece of legislation known as House Bill 40 (HB 40) into law, aimed specifically at advancing the state’s business-friendly reputation.

What’s the Big Deal About HB 40?

HB 40 is set to take effect on September 1, 2025, and it’s shaking things up for business disputes in the Lone Star State. The biggest change? The threshold for a case to qualify for the Business Courts is dropping from a hefty $10 million to a friendlier $5 million. This means more businesses—especially smaller ones—will have access to these specialized courts designed to address high-stakes disputes.

But that’s not all! HB 40 also expands the court’s jurisdiction to include intellectual property (IP) and trade secrets. This change is a game-changer, providing essential protections for companies dealing with sensitive information. Now, if a business needs to enforce an arbitration agreement, they can do so within these specialized courts, allowing for more efficient resolutions.

A Year of Action and Results

In just the first 100 days since the launch of the Business Courts, a total of 53 cases were filed, and Houston’s Eleventh Division was by far the busiest. With the introduction of HB 40, the courts are gearing up for a lot more activity. Eleven cases have already been successfully closed, showing that the efficiency promised by the Business Courts is beginning to take shape.

Interestingly, about one-third of pending cases were previously filed in district courts, with some judges making rulings that cases filed before September 1, 2024, were not eligible for removal to the Business Courts. This aspect brings both clarity and some confusion to the transition, but the courts are already addressing these issues.

The Road Ahead

With the passage of HB 40, significant attention now turns to the Texas Supreme Court, which will be tasked with adopting rules to refine how jurisdiction is determined in Business Court cases. This step is essential to making sure the Business Courts operate smoothly and effectively.

The goal of these reforms isn’t just to simplify the process but to establish Texas as a go-to location for business incorporation, competing with well-established states like Delaware and New York. So if you thought Texas was just about BBQ and football, think again—it’s becoming a hotbed for business activities!

Keeping Things Moving

In an effort to boost efficiency, the Business Court has already introduced local rules for motion practices and requirements for corporate disclosures. Don’t forget about the ongoing discussions among lawmakers about even more changes on the horizon—like further reducing the amount in controversy and extending judges’ terms. The idea here is to keep the wheels of justice turning as smoothly as possible.

In a nutshell, if you’re part of the Texas business scene, you’ll want to keep an eye on the upcoming changes from House Bill 40. With lowered thresholds and expanded jurisdiction, Texas is making it easier than ever for businesses to fairly resolve their disputes. And while it may still be a work in progress, the potential is enormous for improving the state’s legal landscape for commerce.

So get ready, Texas! With these new laws in place, it looks like the business community is in for some exciting times ahead.

Deeper Dive: News & Info About This Topic

• Dykema: Can Texas Business Courts Handle More Cases Without Adding Judges?
• Pillsbury: Bipartisan Passage of House Bill Expanding Texas Business Court Jurisdiction
• Vinson & Elkins: Texas Business Courts Quarterly Update Q1 and Q2 2025
• National Law Review: Texas Legislature Strengthens Business Court with Expanded Jurisdiction
• Wikipedia: Texas Business Courts
• Google Search: Texas Business Courts
• Encyclopedia Britannica: Texas Business Courts
• Google News: Texas Business Courts