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, aimed at enhancing the jurisdiction and operations of the Texas Business Court. The new legislation, set to take effect on September 1, 2025, amends the existing statutes governing the Business Court, making it more accessible to a broader range of commercial disputes.
The essence of H.B. 40 expands the court’s jurisdiction by lowering the amount-in-controversy threshold from $10 million to $5 million. It also lowers the threshold for qualifying a case as a “qualified transaction” to the same amount, thereby increasing the scope of cases that can be heard in the Business Court. In addition, the bill clarifies procedures related to case removal, providing greater flexibility for litigants unable to reach an agreement.
Among the key provisions, the Supreme Court of Texas is mandated to establish rules and procedures that ensure timely determinations of Business Court jurisdiction early in legal proceedings. This is expected to foster greater efficiency and predictability in resolving complex commercial litigation, differentiating Texas as a competitive jurisdiction for businesses incorporating in the state.
Significant Changes to Court Jurisdiction
The enactment of H.B. 40 allows for a substantial increase in the types of cases that can be handled in the Business Court. Intellectual property and trade secrets claims, which were previously excluded from its jurisdiction, will now be heard within this specialized court. Additionally, the Business Court is granted authority over arbitration matters, including the ability to enforce arbitration agreements and review arbitral awards.
These changes reflect a legislative intent to align Texas with other states, such as Delaware and New York, known for their efficient handling of complex commercial disputes. The amendments signal a commitment to improving legal efficiency at a time when national discussions surrounding corporate litigation costs are gaining momentum.
Bipartisan Legislative Support
The journey of H.B. 40 through the legislative process illustrates broad support for reforming Texas’s business litigation landscape. The Texas Senate passed the bill on June 2, 2025, after it received bipartisan approval in the House with a vote of 99–40 on May 13, 2025. This consensus reflects the interests and desires of various stakeholders, including business owners and legal professionals, calling for enhanced clarity and operational functionality within the Texas legal system.
Background Context
The Texas Business Court was established to address the complexities and challenges of commercial litigation. However, the previous framework was perceived by many as limiting, particularly in terms of the value of disputes eligible for its consideration. H.B. 40 addresses these limitations directly, making it easier for businesses to engage with the court and seek efficient resolutions to their legal matters.
The law comes at a crucial time when states are vying to attract more business incorporations, and Texas is positioning itself as a leading venue for business litigation. The reduction of the amount-in-controversy threshold, coupled with the court’s expanded jurisdiction, sends a clear message that Texas is open for business and is committed to providing a robust legal framework to support the growth of its economy.
Conclusion
As H.B. 40 prepares to take effect on September 1, 2025, many in the business community are optimistic about the potential improvements that the reforms will bring. Enhanced access to a specialized legal forum for their grievances may lead to more favorable outcomes for litigants and contribute to a more favorable business climate in Texas.
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 COLLEGE WRITER
The COLLEGE STATION STAFF WRITER represents the experienced team at HERECollegeStation.com, your go-to source for actionable local news and information in College Station, Brazos 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 Brazos Valley Fair & Rodeo, Chilifest, and Aggie Muster. Our coverage extends to key organizations like the Bryan-College Station Chamber of Commerce and United Way of the Brazos Valley, plus leading businesses in education, biotechnology, and retail that power the local economy such as Texas A&M University, Fujifilm Diosynth Biotechnologies, and H-E-B. As part of the broader HERE network, including HEREAustinTX.com, HEREDallas.com, HEREHouston.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
