News Summary
The Texas House of Representatives has passed House Bill 40, a significant legislative change for businesses in Texas. The bill expands the jurisdiction of the Texas Business Court, lowers the amount-in-controversy requirement from $10 million to $5 million, and welcomes new types of cases including intellectual property matters. Additionally, the Business Court can now handle arbitration matters. As Texas positions itself as a competitive alternative to Delaware for corporate governance, businesses are encouraged to adapt to these new legal frameworks starting September 2025.
Texas—On May 13, 2025, the Texas House of Representatives passed House Bill 40 (HB 40) with a decisive vote of 99–40. This bill, signed into law by Governor Abbott, significantly revamps the operational and jurisdictional framework of the Texas Business Court, set to take effect on September 1, 2025. Its main objective is to enhance accessibility for corporate litigants involved in complex business disputes.
One of the flagship amendments included in HB 40 is the reduction of the amount-in-controversy requirement from $10 million to $5 million. This change means that claims from joined parties can now be aggregated to meet this lower threshold. Previously, the $5 million limit was exclusive to fundamental governance and securities matters. Under the new law, the Business Court will be able to hear a broader array of cases, including intellectual property and trade secrets disputes, areas it was not previously authorized to adjudicate.
Additionally, HB 40 clarifies the Business Court’s authority regarding arbitration matters. It grants the court the power to enforce arbitration agreements, appoint arbitrators, and review arbitral awards, thereby aligning its services with the needs of modern corporate governance.
While the original proposal of HB 40 included wider jurisdictional enhancements, the final version focused specifically on the contemporary needs of Texas’s commercial community. This legislative move is seen as a response to the growing scrutiny surrounding Delaware’s long-standing status as a top venue for corporate governance and incorporation, which has recently faced criticism from institutional investors about its judicial processes.
With concerns raised over the fee multipliers faced by plaintiffs’ attorneys in Delaware’s Chancery Court, stakeholders in Texas view the new legislative changes as a potential catalyst to position Texas as an appealing alternative for corporate litigation. The recent adoption of Senate Bill 29 (SB 29), which similarly expands the Business Court’s jurisdiction over corporate governance matters, adds to this momentum.
Texas’s business community now has the opportunity to reassess their governance documents to ensure compliance and glean potential benefits from the amended laws. This initiative could not only streamline litigation but also foster a more favorable business environment in Texas.
In light of the new law, businesses will need to stay informed about other amendments that accompany HB 40, which also impact litigation rights and obligations across the state. These changes mark a significant shift in how Texas positions itself within the competitive landscape of corporate governance.
The Business Court’s expanded jurisdiction and operational improvements are expected to provide corporate litigants with a high level of efficiency and accessibility, responding effectively to the complexities of modern business disputes. As September approaches, Texas stands ready to become an increasingly favorable venue for resolving intricate corporate litigation matters.
Deeper Dive: News & Info About This Topic
- National Law Review: Texas Governor Signs HB 40
- Vinson & Elkins: Potential Changes to Texas Business Courts
- Jackson Walker: Insights on Texas Business Court Exculpation Clause
- Norton Rose Fulbright: What is a Qualified Transaction in the Texas Business Court
- News 13: Texas Changes to Lure Business Amid Dexit Concern
- Wikipedia: Texas
- Google Search: Texas business court
- Google Scholar: Texas business litigation
- Encyclopedia Britannica: Texas
- Google News: Texas business court changes
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.
