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 Enhances Statewide Business Courts
Texas continues to strengthen its position as a business-friendly state with the recent enactment of House Bill 40 (HB 40), which Governor Abbott signed into law on June 20, 2025. Scheduled to take effect on September 1, 2025, HB 40 lowers the threshold for complex commercial disputes in Business Courts from $10 million to $5 million, making these courts more accessible to smaller businesses.
Key Features of HB 40
The most significant change introduced by HB 40 is the reduced threshold for cases eligible for Business Courts, which allows more businesses to seek resolution through this specialized legal avenue. Additionally, the bill expands the jurisdiction of Business Courts to include intellectual property and trade secret cases. This expansion addresses a critical need for protections for businesses handling sensitive information and provides a venue for enforcing arbitration agreements within these courts.
Impact of Business Courts So Far
Since their inception, Business Courts have proven to be a busy venue for commercial litigation. Within the first 100 days of operation, 53 cases were filed, with Houston’s Eleventh Division leading in case volume. As the courts prepare for the changes brought by HB 40, they have already successfully closed eleven cases, indicating a promising start in terms of efficiency and effectiveness. Approximately one-third of the pending cases in the Business Courts were previously in district courts, reflecting a transitional phase where some rulings hindered the movement of cases into Business Courts.
Future Developments
With the passage of HB 40, attention is now focused on the Texas Supreme Court, which will establish necessary rules to formalize how jurisdiction is determined in Business Court cases. This step is critical for ensuring the operational integrity of the Business Courts as they adapt to these new laws.
The primary objective behind these reforms is to solidify Texas as a leading location for business incorporation, effectively competing with established business hubs like Delaware and New York. This shift in focus aims to create a legal environment that not only simplifies dispute resolution but also attracts new businesses to the state.
Looking Ahead
To further enhance the performance of Business Courts, local rules have already been implemented to streamline motion practices and corporate disclosure requirements. Ongoing discussions among Texas lawmakers suggest that additional reforms are possible, such as further lowering the amount in controversy required for cases or extending the terms for judges in these courts. The intent behind these discussions is clear: to ensure a prompt and efficient justice system that meets the needs of Texas’s robust business community.
As the business landscape evolves in Texas, it is essential for business owners and stakeholders to stay informed about the implications of House Bill 40. With the lowered threshold and broadened jurisdiction, the state is poised to facilitate smoother resolutions to business disputes. Though the implementation of these changes will take time, the potential benefits for commerce and business operations are significant.
Overall, these developments mark a proactive approach to bolstering Texas’s status in the business world, promising an exciting future for the state’s commercial activities.
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
Author: STAFF HERE AUSTIN WRITER
The AUSTIN STAFF WRITER represents the experienced team at HEREAustinTX.com, your go-to source for actionable local news and information in Austin, Travis County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as SXSW, Austin City Limits Music Festival, Formula 1 United States Grand Prix, and the Austin Film Festival. Our coverage extends to key organizations like the Greater Austin Chamber of Commerce and Visit Austin, plus leading businesses in technology, automotive, and retail that power the local economy such as Dell Technologies, Tesla, and Apple. As part of the broader HERE network, including HERECollegeStation.com, HEREDallas.com, HEREHouston.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
