News Summary
Governor Greg Abbott has signed House Bill 40 into law, which brings significant changes to Texas business law, especially in commercial litigation. This bill lowers the amount-in-controversy threshold, expands the Business Court’s jurisdiction, and enhances clarity in legal proceedings for Texas businesses. With these improvements, more cases can be processed efficiently, making Texas a competitive venue for business disputes and signaling a commitment to fostering a better environment for both small and large enterprises.
AUSTIN, Texas – On June 20, 2025, Texas Governor Greg Abbott signed House Bill 40 (H.B. 40) into law, a significant measure aimed at enhancing the jurisdiction and operations of the Texas Business Court. The new legislation is set to take effect on September 1, 2025, and proposes various amendments that are designed to improve the efficiency and accessibility of commercial litigation in Texas.
One of the key features of H.B. 40 is the expansion of the Business Court’s jurisdiction. The law lowers the amount-in-controversy threshold from $10 million to $5 million, thereby allowing a broader range of business disputes to be addressed by the court. This adjustment is expected to enhance access for more businesses, as litigation over smaller amounts can now proceed through the Business Court instead of being relegated to district courts.
The bill also modifies the criteria for what constitutes a “qualified transaction,” again lowering the threshold from $10 million to $5 million. This change is part of a broader effort to create more opportunities for businesses to bring cases before the Texas Business Court, which will now have the authority to handle claims related to intellectual property and trade secrets, areas previously excluded from its jurisdiction.
In an effort to further streamline court processes, H.B. 40 clarifies the procedure for case removal when parties cannot agree. This provision enhances flexibility for litigants and ensures that disputes can be managed more efficiently. Additionally, the legislation mandates that the Supreme Court of Texas adopt new rules and procedures to facilitate a timely determination of Business Court jurisdiction at the early stages of legal proceedings.
The Texas Senate passed H.B. 40 on June 2, 2025, following a bipartisan vote in the House on May 13, 2025, which resulted in a 99–40 decision in favor of the bill. These legislative changes reflect a collaborative effort between lawmakers to improve Texas’s business environment.
Implications of the New Law
H.B. 40 is seen as a major step towards establishing Texas as a leading state for business incorporation and litigation by providing a legal framework that promotes efficiency and predictability in resolving complex commercial disputes. The reforms are modeled after similar initiatives in Delaware and New York, recognized for their favorable business court systems.
In addition to expanding the jurisdiction of the Business Court, the law allows the court to make decisions regarding arbitration matters, which includes enforcing arbitration agreements and reviewing arbitral awards. This aspect is particularly significant, as it builds on the court’s existing functions and offers businesses a reliable avenue for resolving arbitration issues.
Background of the Texas Business Court
The Texas Business Court was initially established to handle complex commercial litigation, and its operating framework has evolved in response to the growing demands of the business community. The ongoing national discussions about the rising costs of litigation and the need for more efficient corporate governance further underscore the relevance of such reforms. The introduction of H.B. 40 is a direct response to stakeholder requests for greater clarity and functionality within the Texas legal landscape.
The amendments introduced by H.B. 40 are expected to make the Texas Business Court more accessible and equipped to handle a wider variety of commercial disputes, ultimately contributing to the overall appeal of Texas as a venue for business litigation. As the effective date approaches, businesses and legal practitioners alike are preparing for the implications of this ground-breaking legislation.
Deeper Dive: News & Info About This Topic
- Pillsbury Law: Bipartisan Passage of House Bill
- Foley & Lardner: Texas Legislature Strengthens Business Court
- Norton Rose Fulbright: HB 40 Expands Texas Business Court’s Jurisdiction
- National Law Review: Texas Governor Signs HB 40
- Wikipedia: Business Court
- Google Search: House Bill 40 Texas
Author: STAFF HERE GEORGETOWN
GEORGETOWN STAFF WRITER The GEORGETOWN STAFF WRITER represents the experienced team at HEREgeorgetown.com, your go-to source for actionable local news and information in Georgetown, Williamson 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 the Red Poppy Festival, Georgetown Swirl, and Christmas Stroll. Our coverage extends to key organizations like the Georgetown Chamber of Commerce and the Downtown Georgetown Association, plus leading businesses in manufacturing and tourism that power the local economy such as local wineries and historic downtown shops. As part of the broader HERE network, including HEREaustin.com, HEREcollegestation.com, HEREdallas.com, HEREhouston.com, HEREgeorgetown.com, and HEREsanantonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
