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Texas House Passes H.B. 40, Overhauling Business Courts

News Summary

The Texas House of Representatives has passed House Bill 40, a significant reform aimed at enhancing the state’s business court system. With a vote of 99 to 40, H.B. 40 expands the scope of cases handled by business courts and mandates the Texas Supreme Court to establish clear jurisdiction rules. The bill enjoys bipartisan support and awaits consideration in the Texas Senate. If approved, it promises to create a more efficient legal landscape for businesses, benefiting companies of all sizes and encouraging entrepreneurship across the state.

AUSTIN, TEXAS – On May 13, 2025, the Texas House of Representatives passed House Bill 40 (H.B. 40) with a significant bipartisan vote of 99-40, marking a notable advancement in the state’s approach to business litigation. This bill introduces critical changes to the newly adopted business court system, designed to enhance its effectiveness and scope by expanding the types of cases that fall under its jurisdiction.

The H.B. 40 legislation mandates that the Texas Supreme Court set regulations that will define the jurisdiction of business courts in the state. This requirement is aimed at creating clarity and consistency in how business disputes are managed across Texas, which is vital for both businesses and legal practitioners.

In addition to revising jurisdictional parameters, the bill also encompasses various administrative amendments intended to maintain uniformity within Texas’s statutory framework related to business courts. These adjustments are crucial for ensuring that the business court system operates smoothly and is responsive to the evolving needs of the business community.

With H.B. 40 receiving bipartisan support in the House, its passage indicates a widespread agreement on the importance of restructuring the business court system to better cater to the needs of businesses operating in Texas. The next step for the bill is to be considered by the Texas Senate, where there is a strong likelihood that it will be approved in its current form, although amendments could still be suggested during deliberations.

Should the Senate approve the bill, it will require re-approval from the House if any amendments are made before it is sent to Governor Greg Abbott for final signature. If signed into law, the changes introduced by H.B. 40 are set to take effect on September 1, 2025. However, there is a provision allowing for the bill to take effect sooner if a supermajority of both the House and Senate votes in favor of immediate implementation.

The passage of H.B. 40 signifies an important step towards improving the legal environment for Texas businesses, which has been a focal point for legislators due to the growing complexity of business operations and the necessity for effective dispute resolution mechanisms. With the anticipated support in the Senate, stakeholders in the business community are optimistic about the upcoming changes and their potential impact.

The creation of business courts in Texas was initially designed to ensure that commercial disputes are resolved efficiently and effectively, reducing the burden on traditional courts. The expansion of case types eligible for business court adjudication, as contemplated by H.B. 40, is seen as a crucial enhancement to this system.

As the legislative process continues, businesses will be keeping a close eye on the developments within the Texas Senate regarding H.B. 40. The successful restructuring of the business court system could position Texas as a leader in business-friendly judicial practices, making it an even more attractive location for both existing and prospective companies.

In summary, the Texas House has taken significant steps toward reforming its business court system with the passage of H.B. 40. This bill’s bipartisan support reflects a unified effort to improve the legal landscape for businesses in the state, promising a more streamlined and effective process for handling commercial disputes moving forward.