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A BILL TO BE ENTITLED
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AN ACT
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relating to the creation of a specialty trial court to hear certain |
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cases; authorizing fees. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle A, Title 2, Government Code, is amended |
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by adding Chapter 24A to read as follows: |
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CHAPTER 24A. BUSINESS COURT |
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Sec. 24A.001. DEFINITIONS. In this chapter: |
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(1) "Controlling person" means a person who directly |
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or indirectly controls a governing person, officer, or |
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organization. |
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(2) "Governing documents" means the instruments, |
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documents, or agreements adopted under an organization's governing |
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law to govern the organization's formation and internal affairs. |
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The term includes: |
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(A) a certificate of formation, articles of |
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incorporation, and articles of organization; |
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(B) bylaws; |
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(C) a partnership agreement; |
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(D) a company agreement or operating agreement; |
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(E) a shareholder agreement; |
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(F) a voting agreement or voting trust agreement; |
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and |
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(G) an agreement among owners restricting the |
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transfer of ownership interests. |
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(3) "Governing law" means the law governing the |
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formation and internal affairs of an organization. |
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(4) "Governing person" means a person who is entitled, |
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alone or as part of a group, to manage and direct an organization's |
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affairs under the organization's governing documents and governing |
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law. The term includes: |
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(A) a member of the board of directors of a |
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corporation or other organization; |
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(B) a general partner of a general or limited |
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partnership; |
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(C) a manager of a limited liability company that |
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is managed by its managers; |
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(D) a member of a limited liability company that |
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is managed by its members; |
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(E) a trust manager of a real estate investment |
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trust; and |
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(F) a trustee of a business trust. |
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(5) "Governmental entity" means: |
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(A) this state; or |
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(B) a political subdivision of this state, |
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including a municipality, a county, or any kind of district. |
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(6) "Internal affairs" means: |
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(A) the rights, powers, and duties of an |
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organization's governing persons, officers, owners, and members; |
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and |
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(B) matters relating to the organization's |
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membership or ownership interests. |
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(7) "Managerial official" means a governing person or |
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officer. |
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(8) "Officer" means a person elected, appointed, or |
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designated as an officer of an organization by the organization's |
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governing persons or governing documents. |
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(9) "Organization" means a foreign or domestic entity |
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or association, regardless of whether the organization is for |
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profit or nonprofit. The term includes: |
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(A) a corporation; |
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(B) a limited partnership; |
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(C) a general partnership; |
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(D) a limited liability partnership; |
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(E) a limited liability company; |
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(F) a business trust; |
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(G) a real estate investment trust; |
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(H) a joint venture; |
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(I) a joint stock company; |
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(J) a cooperative; |
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(K) a bank; |
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(L) a credit union; |
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(M) a savings and loan association; |
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(N) an insurance company; and |
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(O) a series of a limited liability company or of |
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another entity. |
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(10) "Owner" means an owner of an organization. The |
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term includes: |
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(A) a shareholder or stockholder of a corporation |
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or other organization; |
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(B) a general or limited partner of a partnership |
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or an assignee of a partnership interest in a partnership; |
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(C) a member of, or an assignee of a membership |
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interest in, a limited liability company; and |
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(D) a member of a nonprofit organization. |
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(11) "Ownership interest" means an owner's interest in |
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an organization, including an owner's economic, voting, and |
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management rights. |
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(12) "Qualified transaction" has the meaning assigned |
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by Section 271.001, Business & Commerce Code. |
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Sec. 24A.002. BUSINESS COURT JUDICIAL DISTRICT. The |
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Business Court Judicial District is composed of all counties in |
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this state. |
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Sec. 24A.003. JURISDICTION AND POWERS. (a) Subject to |
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Subsections (b) and (c), the business court for the Business Court |
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Judicial District has the jurisdiction provided to a district court |
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by Section 8, Article V, Texas Constitution, and the jurisdiction |
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and powers provided to district courts by Chapter 24, including the |
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power to: |
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(1) issue writs of injunction, mandamus, |
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sequestration, attachment, garnishment, and supersedeas; and |
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(2) grant any relief that may be granted by a district |
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court. |
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(b) The business court has within its district civil |
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jurisdiction concurrent with district courts in: |
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(1) a derivative action on behalf of an organization; |
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(2) an action arising out of or relating to a qualified |
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transaction in which the amount in controversy exceeds $10 million, |
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excluding interest, statutory damages, exemplary damages, |
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penalties, attorney's fees, and costs; |
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(3) an action regarding the governance or internal |
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affairs of an organization; |
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(4) an action in which a claim under a state or federal |
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securities or trade regulation law is asserted against: |
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(A) an organization; |
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(B) a governing or controlling person or officer |
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of an organization for an act or omission by the organization or by |
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the person in the person's capacity as a governing person; or |
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(C) an underwriter of securities issued by the |
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organization or the auditor of an organization; |
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(5) an action by an organization, or an owner or a |
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member of an organization, if the action: |
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(A) is brought against an owner, managerial |
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official, or controlling person of the organization; and |
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(B) alleges an act or omission by the person in |
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the person's capacity as an owner, managerial official, or |
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controlling person of the organization; |
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(6) an action alleging that an owner, managerial |
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official, or controlling person breached a duty by reason of the |
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person's status as an owner, managerial official, or controlling |
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person, including the duty of care, loyalty, or good faith; |
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(7) an action seeking to hold an owner, member, or |
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governing person of an organization liable for an obligation of the |
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organization, other than on account of a written contract signed by |
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the person to be held liable in a capacity other than as an owner, |
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member, or governing person; |
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(8) an action in which the amount in controversy |
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exceeds $10 million, excluding interest, statutory damages, |
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exemplary damages, penalties, attorney's fees, and costs, that: |
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(A) arises against, between, or among |
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organizations, governing authorities, governing persons, members, |
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or owners, relating to a contract transaction for business, |
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commercial, investment, agricultural, or similar purposes; or |
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(B) involves violations of the Finance Code or |
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Business & Commerce Code; |
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(9) an action seeking a declaratory judgment or |
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injunctive relief brought under Chapter 37, Civil Practice and |
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Remedies Code, involving: |
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(A) the Business Organizations Code; |
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(B) an organization's governing documents; or |
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(C) a dispute based on claims that fall within |
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the provisions of this subsection; and |
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(10) an action arising out of the Business |
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Organizations Code. |
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(c) The business court does not have jurisdiction of: |
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(1) a civil action brought by or against a |
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governmental entity, unless the governmental entity invokes or |
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consents to the jurisdiction of the business court; or |
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(2) any claim in which a party seeks recovery of |
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monetary damages for personal injury or death or any claim arising |
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under Chapter 17, Business & Commerce Code, the Estates Code, the |
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Family Code, or Title 9, Property Code, unless all parties and a |
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judge of the business court agree that the claim may proceed in the |
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business court. |
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Sec. 24A.004. JUDICIAL AUTHORITY. A judge of the business |
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court has all powers, duties, immunities, and privileges of a |
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district judge. |
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Sec. 24A.005. INITIAL FILING; REMOVAL AND REMAND; TRANSFER |
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AND DISMISSAL. (a) An action in the jurisdiction of the business |
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court may be filed in the business court. If the business court |
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does not have subject matter jurisdiction of the action, or part of |
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the action, the court shall, at the option of the party filing the |
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action: |
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(1) transfer the action or part of the action to an |
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appropriate district court; or |
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(2) dismiss the action or part of the action without |
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prejudice to the party's rights. |
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(b) If an action or part of an action is to be transferred |
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under Subsection (a)(1), and the action or part of the action could |
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have been filed in more than one county, the party filing the action |
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may select the county to which the action or part of the action is |
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transferred. |
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(c) A party to an action filed in a district court or county |
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court at law that is in the subject matter jurisdiction of the |
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business court may remove the action to the business court. If the |
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business court does not have jurisdiction of the action or part of |
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the action, the business court shall remand the action, or the part |
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in which the business court does not have jurisdiction, to the court |
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from which the action was removed. |
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(d) Removal of a case to the business court is not subject to |
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the statutes or rules governing the due order of pleading. |
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(e) Removal of a case does not waive a defect in venue or |
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constitute an appearance to determine personal jurisdiction. |
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Sec. 24A.006. APPEALS. (a) Notwithstanding any other law |
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and except as provided by Subsection (b) and in instances when the |
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supreme court has concurrent or exclusive jurisdiction, the |
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Fifteenth Court of Appeals has exclusive jurisdiction over an |
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appeal from an order or judgment of the business court or an |
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original proceeding related to an action or order of the business |
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court. |
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(b) If the Fifteenth Court of Appeals is not created, an |
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appeal from an order or judgment of the business court or an |
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original proceeding related to an action or order of the business |
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court shall be filed in the intermediate court of appeals with |
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jurisdiction of the appeal under Section 22.220. |
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(c) The procedure governing an appeal or original |
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proceeding from the business court is the same as the procedure for |
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an appeal or original proceeding from a district court. |
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Sec. 24A.007. QUALIFICATIONS OF JUDGE. A judge of the |
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business court must be: |
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(1) at least 35 years of age; |
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(2) a United States citizen; |
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(3) a resident of this state for at least two years |
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before appointment; and |
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(4) a licensed attorney in this state and have 10 or |
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more years of experience in: |
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(A) practicing complex civil business |
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litigation; |
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(B) practicing business transaction law; |
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(C) teaching courses in complex civil business |
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litigation or complex business transaction law at an accredited law |
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school in this state; |
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(D) serving as a judge of a court in this state |
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with civil jurisdiction; or |
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(E) any combination of experience described by |
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Paragraphs (A)-(D). |
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Sec. 24A.008. COMPOSITION OF COURT. (a) The governor, with |
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the advice and consent of the senate, shall appoint seven judges to |
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serve the business court. |
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(b) A judge of the business court may be reappointed. |
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(c) The governor may not appoint more than three judges who |
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reside in the same county. |
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Sec. 24A.009. TERMS OF OFFICE. A judge of the business |
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court serves a two-year term. |
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Sec. 24A.010. VACANCY. If a vacancy occurs on the business |
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court, the governor, with the advice and consent of the senate, |
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shall appoint, in the same manner as the original appointment, |
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another person to serve for the remainder of the unexpired term. |
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Sec. 24A.011. JUDGE'S SALARY. (a) A judge of the business |
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court shall be paid a total annual salary from the state that is the |
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sum of: |
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(1) the salary paid to a district judge by the state |
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under Section 659.012; and |
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(2) the maximum amount of county contributions and |
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supplements allowed by law to be paid to a district judge under |
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Section 659.012. |
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(b) The salary shall be paid in equal monthly installments. |
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Sec. 24A.012. REMOVAL; DISQUALIFICATION AND RECUSAL. (a) |
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A judge of the business court may be removed from office in the same |
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manner and for the same reasons as a district judge. |
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(b) A judge of the business court is disqualified and |
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subject to mandatory recusal for the same reasons a district judge |
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is subject to disqualification or recusal in a pending case. |
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Disqualification or recusal of a judge of the business court shall |
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be governed by the same procedure as disqualification or recusal of |
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a district judge. |
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Sec. 24A.013. PRIVATE PRACTICE OF LAW. A judge of the |
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business court shall diligently discharge the duties of the office |
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on a full-time basis and may not engage in the private practice of |
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law. |
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Sec. 24A.014. VISITING JUDGE. (a) A retired or former |
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judge or justice may be assigned as a visiting judge of the business |
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court by the chief justice of the supreme court. A visiting judge |
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of the business court is subject to objection, disqualification, or |
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recusal in the same manner as a retired or former judge or justice |
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is subject to objection, disqualification, or recusal if appointed |
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as a visiting district judge. |
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(b) Before accepting an assignment as a visiting judge of |
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the business court, a retired or former judge or justice shall take |
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the constitutional oath of office required of appointed officers of |
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this state and file the oath with the supreme court. |
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Sec. 24A.015. JURY PRACTICE AND PROCEDURE. (a) A party in |
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an action pending in the business court has the right to a trial by |
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jury when required by the constitution. |
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(b) A jury trial shall be held in a county in which venue |
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would be found under Section 15.002, Civil Practice and Remedies |
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Code. |
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(c) Subject to Subsection (b), a jury trial in a case |
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removed to the business court shall be held in the county in which |
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the action was originally filed. |
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(d) Subject to Subsection (b), a jury trial in a case filed |
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initially in the business court shall be held in any county in which |
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it could have been filed under Section 15.002, Civil Practice and |
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Remedies Code, as chosen by the plaintiff. |
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(e) The parties and the judge of the business court may |
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agree to hold the jury trial in any other county. A party may not be |
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required to agree to hold the jury trial in a different county. |
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(f) The drawing of jury panels, selection of jurors, and |
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other jury-related practice and procedure in the business court |
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shall be the same as for the district court in the county in which |
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the trial is held. |
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(g) Practice, procedure, rules of evidence, issuance of |
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process and writs, and all other matters pertaining to the conduct |
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of trials, hearings, and other business in the business court are |
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governed by the laws and rules prescribed for district courts, |
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unless otherwise provided by this chapter. |
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Sec. 24A.016. WRITTEN OPINIONS. To facilitate the |
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establishment of a coherent body of law, a judge of the business |
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court shall issue a written opinion when deciding issues of law by |
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order or judgment, unless: |
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(1) the court has a well-developed body of law on the |
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issue; |
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(2) the court is applying the court's precedent on the |
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issue; and |
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(3) another opinion on the issue will not |
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significantly contribute to the development of the law. |
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Sec. 24A.017. COURT LOCATION; STAFFING. (a) The business |
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court shall have a clerk, whose office shall be located in Travis |
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County in facilities provided by this state. The clerk shall: |
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(1) receive all filings in the business court; and |
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(2) fulfill the legal and administrative functions of |
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a district clerk and an appellate court clerk. |
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(b) Each judge of the business court shall maintain chambers |
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in the county seat of the judge's county of residence in facilities |
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provided by this state. |
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(c) Subject to Section 24A.015, the business court, or any |
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judge of the business court, may hold court at any location in this |
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state, as the court determines is necessary or convenient for a |
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particular civil action. |
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(d) The business court shall use the most advanced |
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technology feasible when necessary and appropriate to facilitate |
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expeditious proceedings in matters brought before the court. As |
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determined by the business court, counsel and parties may appear |
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before the business court by means of Internet-based or other |
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technological devices rather than in person. |
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(e) In a county in which the business court sits, the |
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sheriff shall in person or by deputy attend the business court as |
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required by the court. The sheriff or deputy is entitled to be |
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reimbursed by the state for the cost of attending court. |
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(f) Subject to any limitations provided by the General |
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Appropriations Act, the business court may appoint personnel |
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necessary for the operation of the court, including: |
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(1) the clerk of the court; |
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(2) staff attorneys for the court; |
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(3) staff attorneys for each judge of the business |
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court; |
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(4) court coordinators; and |
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(5) administrative assistants. |
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(g) The court officials shall perform the duties and |
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responsibilities of their offices and are entitled to the |
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compensation, fees, and allowances prescribed by law for the |
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offices. |
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Sec. 24A.018. FEES. The business court shall provide rates |
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for fees associated with filings and actions in the business court. |
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The fees shall be set at a sufficient amount to cover the costs of |
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administering the provisions of this chapter, taking into account |
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fee waivers in the interest of justice. |
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Sec. 24A.019. SEAL. The seal of the business court is the |
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same as that provided by law for a district court except that the |
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seal must contain the name "The Business Court of Texas." |
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Sec. 24A.020. RULES. (a) The supreme court shall |
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promulgate rules of civil procedure as the court determines |
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necessary, including rules providing for: |
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(1) the timely and efficient removal and remand of |
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cases to and from the business court; and |
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(2) the assignment of cases to judges of the business |
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court. |
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(b) The business court may adopt rules of practice and |
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procedure, subject to any approval required by the supreme court or |
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statute. |
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SECTION 2. Except as otherwise provided by this Act, the |
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business court for the Business Court Judicial District is created |
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January 1, 2025. |
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SECTION 3. As soon as practicable after the effective date |
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of this Act, the governor shall appoint judges to the business court |
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for the Business Court Judicial District, as required by Section |
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24A.008, Government Code, as added by this Act. |
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SECTION 4. (a) Notwithstanding Chapter 24A, Government |
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Code, as added by this Act, the business court for the Business |
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Court Judicial District is not created unless the legislature makes |
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a specific appropriation of money for that purpose. For purposes of |
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this subsection, a specific appropriation is an appropriation |
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identifying the business court or an Act of the 88th Legislature, |
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Regular Session, 2023, relating to the creation of a specialty |
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trial court to hear certain cases or of the business court. |
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(b) Notwithstanding Section 24A.006(a), Government Code, as |
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added by this Act, a court of appeals retains the jurisdiction the |
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court had on December 31, 2024, if the business court for the |
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Business Court Judicial District is not created as a result of |
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Subsection (a) of this section. |
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SECTION 5. The changes in law made by this Act apply to |
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civil actions commenced on or after January 1, 2025. |
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SECTION 6. This Act takes effect September 1, 2023. |