Enrolled Bill Summary

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House Bill 40 amends the Civil Practice and Remedies Code and Government Code to revise provisions relating to the business court and clarify the application of certain state laws governing the judiciary with respect to the business court. Among other provisions, the bill revises the jurisdiction of the business court as follows:

• sets the threshold for the amount in controversy for all applicable actions to fall within the court's jurisdiction at any amount that exceeds $5 million, excluding certain costs;
• specifies that an action arising out of a business, commercial, or investment contract or transaction in which there is an agreement that the court has jurisdiction falls within the court's jurisdiction;
• includes within the court's jurisdiction an action arising out of or relating to the ownership, use, licensing, lease, installation, or performance of intellectual property and an action arising out of the Texas Uniform Trade Secrets Act;
• specifies that the civil jurisdiction the court has concurrent with district courts over certain actions includes actions in which a district court has exclusive jurisdiction;
• establishes that the court has civil jurisdiction concurrent with district courts in certain actions relating to arbitration if a claim included in the controversy in arbitration is subject to the court's jurisdiction; and
• establishes that the amount in controversy for jurisdictional purposes is the total amount of all joined parties' claims.

The bill also expands the definition of a "qualified transaction" for jurisdictional purposes and revises the claims over which the court does not have jurisdiction unless the claim falls within the court's supplemental jurisdiction. The bill requires the Texas Supreme Court by rule to establish procedures for the prompt, efficient, and final determination of business court jurisdiction on the filing of an action in the business court.

 House Bill 40 provides for the appointment by the business court or a business court division of a receiver for the mineral interest or leasehold interest under a mineral lease owned by a nonresident or absent defendant in certain actions or for contingent interests in minerals or royalty interests owned by a nonresident or absent defendant, as applicable. The bill provides for a writ of injunction to be tried in a business court division, the appeal of an interlocutory order of the business court, and a business court judge's or clerk's authority to take a deposition on written questions of a witness and to issue certain writs. Furthermore, the bill provides for the filing of an initial application for an order under Civil Practice and Remedies Code provisions governing general arbitration in the business court and requires such an application to plead facts to establish venue in an applicable county.

With respect to proper venue for actions within the court's jurisdiction, House Bill 40 does the following:

• provides that a party's governing documents may establish venue in a county in a division of the court in certain actions; and
• establishes that an interlocutory appeal from the business court's determination in a suit with more than one plaintiff that a plaintiff did or did not independently establish proper venue or that a plaintiff who did not independently establish proper venue did or did not establish certain information must be taken to the Fifteenth Court of Appeals.

House Bill 40 continues the Second, Fifth, Sixth, Seventh, Ninth, and Tenth Business Court Divisions and moves Montgomery County from the Second Business Court Division to the Eleventh Business Court Division.

House Bill 40 revises provisions relating to the selection of an administrative presiding judge for the business court and entitles the administrative presiding judge to an annual state base salary and an additional amount equal to the amount provided to a local administrative district judge for a number of district courts equal to the total number of business court judges. The bill entitles a business court judge to an annual state salary, in addition to the annual state base salary, and certain expenses incurred in the discharge of the judge's official duties.

House Bill 40 provides for the recusal of a business court judge who determines on their own motion they should not hear a case. The bill makes statutory provisions relating to judicial education requirements applicable to a business court judge but exempts a business court judge from appellate court judicial training requirements that are not germane to the jurisdiction of the business court and further exempts the business court from the application of statutory provisions relating to the appointment of attorneys ad litem, guardians ad litem, mediators, and guardians by certain courts. The bill provides for the assignment of an active judge or justice as a visiting judge of the business court and of an active judge of the business court as a visiting judge of certain other courts.

House Bill 40 changes the location in which each business court judge must maintain chambers and authorizes the chief justice of the supreme court to approve the location of a business court judge's chambers in a county other than a qualifying county. The bill provides for the Office of Court Administration (OCA) to contract for the use of facilities for a business court judge's chambers with a public or private party, county reimbursement from the state for accommodating the business court in the conduct of the court's proceedings in county facilities, and any licensed peace officer employed by the state or local governmental entity to attend the business court and provide security for business court judges.

House Bill 40 specifies the information that must be included in OCA's annual report to the legislature on the business court.

House Bill 40 establishes that a civil action commenced before September 1, 2024, that is within the jurisdiction of the business court may be transferred to and heard by the court on an agreed motion of a party and permission of the court under rules adopted by the supreme court for the purpose.