89R23330 AMF-D

By: Landgraf H.B. No. 40

Substitute the following for H.B. No. 40:

By: Leach C.S.H.B. No. 40

A BILL TO BE ENTITLED

AN ACT

relating to the business court.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 11.101(e), Civil Practice and Remedies Code, is amended to read as follows:

(e) A prefiling order entered under Subsection (a) by a district court, a [or] statutory county court, or the business court applies to each court in this state.

SECTION 2. Section 15.003(c), Civil Practice and Remedies Code, is amended to read as follows:

(c) An interlocutory appeal permitted by Subsection (b) must be taken to the court of appeals district in which the trial court is located under the procedures established for interlocutory appeals, except that an interlocutory appeal from the business court must be taken to the Fifteenth Court of Appeals. The appeal may be taken by a party that is affected by the trial court's determination under Subsection (a). The court of appeals shall:

(1) determine whether the trial court's order is proper based on an independent determination from the record and not under either an abuse of discretion or substantial evidence standard; and

(2) render judgment not later than the 120th day after the date the appeal is perfected.

SECTION 3. Section 19.003(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) To supply a record that has been lost, destroyed, or removed:

(1) a person interested in an instrument or in a judgment, order, or decree of the district court may file an application with the district clerk of the county in which the record was lost or destroyed or from which the record was removed; [or]

(2) a person interested in a judgment, order, or decree of a county court may file an application with the clerk of the court to which the record belonged; or

(3) a person interested in a judgment, order, or decree of the business court may file an application with the clerk of the business court.

SECTION 4. Section 20.001(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) A deposition on written questions of a witness who is alleged to reside or to be in this state may be taken by:

(1) a clerk of a district court;

(2) a judge or clerk of a county court; [or]

(3) a judge or clerk of the business court; or

(4) a notary public of this state.

SECTION 5. Section 30.014(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) In a civil action, including a probate or guardianship proceeding, filed in a district court, a county court, a statutory county court, a [or] statutory probate court, or the business court, each party or the party's attorney shall include in its initial pleading:

(1) the last three numbers of the party's driver's license number, if the party has been issued a driver's license; and

(2) the last three numbers of the party's social security number, if the party has been issued a social security number.

SECTION 6. Section 30.015(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) In a civil action filed in a district court, a county court, a statutory county court, a [or] statutory probate court, or the business court, each party or the party's attorney must provide the clerk of the court with written notice of the party's name and current residence or business address.

SECTION 7. Section 30.016(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) In this section, "tertiary recusal motion" means a third or subsequent motion for recusal or disqualification filed against a district court, [or] statutory county court, or business court judge by the same party in a case.

SECTION 8. Sections 30.017(a) and (c), Civil Practice and Remedies Code, are amended to read as follows:

(a) A claim against a district court, statutory probate court, [or] statutory county court, or business court judge that is added to a case pending in the court to which the judge was elected or appointed:

(1) must be made under oath;

(2) may not be based solely on the rulings in the pending case but must plead specific facts supporting each element of the claim in addition to the rulings in the pending case; and

(3) is automatically severed from the case.

(c) The presiding judge of the administrative region, [or] the presiding judge of the statutory probate courts, or the administrative presiding judge of the business court shall assign the severed claim to a different judge. The judge shall dismiss the claim if the claim does not satisfy the requirements of Subsection (a)(1) or (2).

SECTION 9. Section 51.014(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) A person may appeal from an interlocutory order of a district court, a county court at law, a statutory probate court, a [or] county court, or the business court that:

(1) appoints a receiver or trustee;

(2) overrules a motion to vacate an order that appoints a receiver or trustee;

(3) certifies or refuses to certify a class in a suit brought under Rule 42 of the Texas Rules of Civil Procedure;

(4) grants or refuses a temporary injunction or grants or overrules a motion to dissolve a temporary injunction as provided by Chapter 65;

(5) denies a motion for summary judgment that is based on an assertion of immunity by an individual who is an officer or employee of the state or a political subdivision of the state;

(6) denies a motion for summary judgment that is based in whole or in part upon a claim against or defense by a member of the electronic or print media, acting in such capacity, or a person whose communication appears in or is published by the electronic or print media, arising under the free speech or free press clause of the First Amendment to the United States Constitution, or Article I, Section 8, of the Texas Constitution, or Chapter 73;

(7) grants or denies the special appearance of a defendant under Rule 120a, Texas Rules of Civil Procedure, except in a suit brought under the Family Code;

(8) grants or denies a plea to the jurisdiction by a governmental unit as that term is defined in Section 101.001;

(9) denies all or part of the relief sought by a motion under Section 74.351(b), except that an appeal may not be taken from an order granting an extension under Section 74.351;

(10) grants relief sought by a motion under Section 74.351(l);

(11) denies a motion to dismiss filed under Section 90.007;

(12) denies a motion to dismiss filed under Section 27.003;

(13) denies a motion for summary judgment filed by an electric utility regarding liability in a suit subject to Section 75.0022;

(14) denies a motion filed by a municipality with a population of 500,000 or more in an action filed under Section 54.012(6) or 214.0012, Local Government Code;

(15) makes a preliminary determination on a claim under Section 74.353;

(16) overrules an objection filed under Section 148.003(d) or denies all or part of the relief sought by a motion under Section 148.003(f); or

(17) grants or denies a motion for summary judgment filed by a contractor based on Section 97.002.

SECTION 10. Section 51.016, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 51.016. APPEAL ARISING UNDER FEDERAL ARBITRATION ACT. In a matter subject to the Federal Arbitration Act (9 U.S.C. Section 1 et seq.), a person may take an appeal or writ of error to the court of appeals from the judgment or interlocutory order of a district court, a county court at law, a [or] county court, or the business court under the same circumstances that an appeal from a federal district court's order or decision would be permitted by 9 U.S.C. Section 16.

SECTION 11. Section 61.021, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 61.021. WHO MAY ISSUE. The judge or clerk of a district court, a [or] county court, or the business court or a justice of the peace may issue a writ of original attachment returnable to the [his] court of issuance.

SECTION 12. Section 63.002, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 63.002. WHO MAY ISSUE. The clerk of a district court, a [or] county court, or the business court or a justice of the peace may issue a writ of garnishment returnable to the clerk's [his] court.

SECTION 13. Section 64.091(b), Civil Practice and Remedies Code, is amended to read as follows:

(b) In the following actions, a district court or the business court may appoint a receiver for the mineral interest or leasehold interest under a mineral lease owned by a nonresident or absent defendant:

(1) an action that is brought by a person claiming or owning an undivided mineral interest in land in this state or an undivided leasehold interest under a mineral lease of land in this state and that has one or more defendants who have, claim, or own an undivided mineral interest in the same property; or

(2) an action that is brought by a person claiming or owning an undivided leasehold interest under a mineral lease of land in this state and that has one or more defendants who have, claim, or own an undivided leasehold interest under a mineral lease of the same property.

SECTION 14. Sections 64.092(a) and (c), Civil Practice and Remedies Code, are amended to read as follows:

(a) On the application of a person who has a vested, contingent, or possible interest in land or an estate subject to a contingent future interest, a district court or the business court division of the county in which all or part of the land is located may appoint a receiver for the land or estate, pending the occurrence of the contingency and the vesting of the future interest, if:

(1) the land or estate is susceptible to drainage of oil, gas, or other minerals;

(2) lease of the land for oil, gas, or mineral development and the safe and proper investment of the proceeds will inure to the benefit and advantage of the persons entitled to the proceeds; or

(3) lease of the land for the production of oil, gas, or other minerals is necessary for the conservation, preservation, or protection of the land or estate or of a present, contingent, or future interest in the land or estate.

(c) On the application of a person who has a vested, contingent, or possible interest in land or an estate that is under an oil, gas, or mineral lease and is subject to a contingent future interest, a district court or the business court division of the county in which all or part of the land is located may appoint a receiver for the contingent future interests, pending the occurrence of the contingency and the vesting of the future interest, if:

(1) the lease fails to provide for pooling or contains pooling provisions that are ineffective as to the contingent future interest covered by the lease; and

(2) the pooling of the contingent future interest:

(A) is necessary to protect correlative rights;

(B) is necessary to prevent the physical or economic waste of oil, gas, or other minerals;

(C) will inure to the benefit and advantage of the persons entitled to the future interest; or

(D) is necessary for the conservation, preservation, or protection of the land or estate or of a present, contingent, or future interest in the land or estate.

SECTION 15. Section 64.093(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) A district court or the business court may appoint a receiver for the royalty interest owned by a nonresident or absent defendant in an action that:

(1) is brought by a person claiming or owning an undivided mineral interest in land in this state or an undivided leasehold interest under a mineral lease of land in the state; and

(2) has one or more defendants who have, claim, or own an undivided royalty interest in that property.

SECTION 16. Section 65.022, Civil Practice and Remedies Code, is amended by adding Subsection (e) to read as follows:

(e) A business court judge may grant a writ returnable to another business court judge if that judge cannot be reached by the ordinary and available means of travel and communication in sufficient time to implement the purpose sought for the writ. In seeking a writ under this subsection, the applicant or attorney for the applicant shall attach to the application an affidavit that fully states the facts of the inaccessibility and the efforts made to reach and communicate with the other business court judge. The business court judge to whom the application is made shall refuse to hear the application unless the judge determines the applicant made fair and reasonable efforts to reach and communicate with the other business court judge. The injunction may be dissolved on a showing the applicant did not first make reasonable efforts to procure a hearing on the application before the other business court judge.

SECTION 17. Section 65.023(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) Except as provided by Subsection (b), a writ of injunction against a party who is a resident of this state shall be tried in a district or county court in the county in which the party is domiciled, or in the business court division of the county in which the party is domiciled. If the writ is granted against more than one party, it may be tried in the proper court of a [the] county in which an enjoined party [either party] is domiciled.

SECTION 18. Section 65.045(c), Civil Practice and Remedies Code, is amended to read as follows:

(c) The business court, district courts, and statutory county courts [in a county] may not adopt local rules in conflict with this subchapter.

SECTION 19. Section 151.001, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 151.001. REFERRAL BY AGREEMENT. On agreement of the parties, in civil or family law matters pending in a district court, a statutory probate court, a [or] statutory county court, or the business court, the judge in whose court the case is pending may order referral of the case as provided by this chapter and shall stay proceedings in the judge's court pending the outcome of the trial. Any or all of the issues in the cases, whether an issue of fact or law, may be referred.

SECTION 20. Section 151.003, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 151.003. QUALIFICATIONS OF JUDGE. The special judge must be a retired or former district court, statutory county court, statutory probate court, business court, or appellate court judge who:

(1) has served as a judge for at least four years in a district court, a statutory county court, a statutory probate court, the business court, an [or] appellate court, or a combination of the preceding courts;

(2) has developed substantial experience in the judge's area of specialty;

(3) has not been removed from office or resigned while under investigation for discipline or removal; and

(4) annually demonstrates completion in the past calendar year of at least five days of continuing legal education in courses approved by the state bar or the supreme court.

SECTION 21. Section 151.011, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 151.011. SPECIAL JUDGE'S VERDICT. The special judge's verdict must comply with the requirements for a verdict by the referring court, including any applicable requirements for the issuance of a written opinion. The verdict stands as a verdict of the referring judge's court. Unless otherwise specified in an order of referral, the special judge shall submit the verdict not later than the 60th day after the day the trial adjourns.

SECTION 22. Section 151.012, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 151.012. NEW TRIAL. If the special judge does not submit the verdict and any applicable written opinion within the time period provided by Section 151.011, the court may grant a new trial if:

(1) a party files a motion requesting the new trial;

(2) notice is given to all parties stating the time and place that a hearing will be held on the motion; and

(3) the hearing is held.

SECTION 23. Section 151.013, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 151.013. RIGHT TO APPEAL. The right to appeal is preserved. An appeal is from the order of the referring judge's court as provided by applicable law, including the Texas Rules of Civil Procedure and the Texas Rules of Appellate Procedure.

SECTION 24. Section 154.001(1), Civil Practice and Remedies Code, is amended to read as follows:

(1) "Court" includes an appellate court, a district court, the business court, a constitutional county court, a statutory county court, a family law court, a probate court, a municipal court, or a justice of the peace court.

SECTION 25. Section 171.002, Civil Practice and Remedies Code, is amended by adding Subsection (d) to read as follows:

(d) This chapter does not confer on the business court any new or additional jurisdiction.

SECTION 26. Sections 171.086(a) and (b), Civil Practice and Remedies Code, are amended to read as follows:

(a) Before arbitration proceedings begin, in support of arbitration a party may file an application for a court order, including an order to:

(1) invoke the jurisdiction of the court over the adverse party and to effect that jurisdiction by service of process on the party before arbitration proceedings begin;

(2) invoke the jurisdiction of the court over an ancillary proceeding in rem, including by attachment, garnishment, or sequestration, in the manner and subject to the conditions under which the proceeding may be instituted and conducted ancillary to a civil action in a district court or the business court, as applicable;

(3) restrain or enjoin:

(A) the destruction of all or an essential part of the subject matter of the controversy; or

(B) the destruction or alteration of books, records, documents, or other evidence needed for the arbitration;

(4) obtain from the court in its discretion an order for a deposition for discovery, perpetuation of testimony, or evidence needed before the arbitration proceedings begin;

(5) appoint one or more arbitrators so that an arbitration under the agreement to arbitrate may proceed; or

(6) obtain other relief, which the court can grant in its discretion, needed to permit the arbitration to be conducted in an orderly manner and to prevent improper interference or delay of the arbitration.

(b) During the period an arbitration is pending before the arbitrators or at or after the conclusion of the arbitration, a party may file an application for a court order, including an order:

(1) that was referred to or that would serve a purpose referred to in Subsection (a);

(2) to require compliance by an adverse party or any witness with an order made under this chapter by the arbitrators during the arbitration;

(3) to require the issuance and service under court order, rather than under the arbitrators' order, of a subpoena, notice, or other court process:

(A) in support of the arbitration; or

(B) in an ancillary proceeding in rem, including by attachment, garnishment, or sequestration, in the manner of and subject to the conditions under which the proceeding may be conducted ancillary to a civil action in a district court or the business court, as applicable;

(4) to require security for the satisfaction of a court judgment that may be later entered under an award;

(5) to support the enforcement of a court order entered under this chapter; or

(6) to obtain relief under Section 171.087, 171.088, 171.089, or 171.091.

SECTION 27. Section 171.093, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 171.093. HEARING; NOTICE. The court shall hear each initial and subsequent application under this subchapter in the manner and with the notice required by law or court rule for making and hearing a motion filed in a pending civil action in a district court or the business court, as applicable.

SECTION 28. Section 171.094(b), Civil Practice and Remedies Code, is amended to read as follows:

(b) To the extent applicable, the process and service and the return of service must be in the form and include the substance required for process and service on a defendant in a civil action in a district court or the business court, as applicable.

SECTION 29. Section 171.095(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) After an initial application has been made, notice to an adverse party for each subsequent application shall be made in the same manner as is required for a motion filed in a pending civil action in a district court or the business court, as applicable. This subsection applies only if:

(1) jurisdiction over the adverse party has been established by service of process on the party or in rem for the initial application; and

(2) the subsequent application relates to:

(A) the same arbitration or a prospective arbitration under the same agreement to arbitrate; and

(B) the same controversy or controversies.

SECTION 30. Section 171.096, Civil Practice and Remedies Code, is amended by amending Subsections (a), (b), and (c) and adding Subsection (e) to read as follows:

(a) Except as otherwise provided by this section, a party must file the initial application:

(1) in the county in which an adverse party resides or has a place of business or in the business court; or

(2) if an adverse party does not have a residence or place of business in this state, in any county or in the business court.

(b) If the agreement to arbitrate provides that the hearing before the arbitrators is to be held in a county in this state, a party must file the initial application with the clerk of the court of that county or with the clerk of the business court.

(c) If a hearing before the arbitrators has been held, a party must file the initial application with the clerk of the court of the county in which the hearing was held or with the clerk of the business court.

(e) An initial application filed in the business court must plead facts to establish venue in a county in a division of the business court as provided by Subsection (a)(1) or (2), (b), or (c), as applicable.

SECTION 31. Sections 171.097(a) and (b), Civil Practice and Remedies Code, are amended to read as follows:

(a) On application of a party adverse to the party who filed the initial application, a court that has jurisdiction but that is not a court [located in a county other than as] described by Section 171.096 shall transfer the application to a court [of a county] described by that section.

(b) The court shall transfer the application by an order comparable to an order sustaining a plea of privilege to be sued in a civil action in a district court or a division of the business court of a county other than the county in which an action is filed.

SECTION 32. Section 171.098(b), Civil Practice and Remedies Code, is amended to read as follows:

(b) The appeal shall be taken to the applicable court of appeals in the manner and to the same extent as an appeal from an order or judgment in a civil action.

SECTION 33. Section 172.001, Civil Practice and Remedies Code, is amended by adding Subsection (e) to read as follows:

(e) This chapter does not confer on the business court any new or additional jurisdiction.

SECTION 34. Sections 172.054(a), (b), and (d), Civil Practice and Remedies Code, are amended to read as follows:

(a) On request of a party, the district court or division of the business court of the county in which the place of arbitration is located shall appoint each arbitrator if:

(1) an agreement is not made under Section 172.053(a) in an arbitration with a sole arbitrator and the parties fail to agree on the arbitrator; or

(2) the appointment procedure in Section 172.053(b) applies and:

(A) a party fails to appoint an arbitrator not later than the 30th day after the date of receipt of a request to do so from the other party; or

(B) the two appointed arbitrators fail to agree on the third arbitrator not later than the 30th day after the date of their appointment.

(b) On request of a party, the district court or division of the business court of the county in which the place of arbitration is located may take necessary measures if under an appointment procedure agreed to by each party:

(1) a party fails to act as required under that procedure;

(2) the parties or two appointed arbitrators fail to reach an agreement expected of them under that procedure; or

(3) a third party, including an institution, fails to perform a function assigned to the party under that procedure.

(d) A decision of the [district] court under this section is final and not subject to appeal.

SECTION 35. Section 172.055, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 172.055. FACTORS CONSIDERED. In appointing an arbitrator, the [district] court shall consider:

(1) each qualification required of the arbitrator by the arbitration agreement;

(2) any consideration making more likely the appointment of an independent and impartial arbitrator; and

(3) in the case of a sole or third arbitrator, the advisability of appointing an arbitrator of a nationality other than that of any party.

SECTION 36. Section 172.060(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) If a challenge under Sections 172.059(b) and (c) is unsuccessful, the challenging party, not later than the 30th day after the date the party receives notice of the decision rejecting the challenge, may request the district court or the division of the business court of the county in which the place of arbitration is located to decide the challenge.

SECTION 37. Section 172.061(b), Civil Practice and Remedies Code, is amended to read as follows:

(b) If there is a controversy concerning the termination of the arbitrator's mandate under Subsection (a), a party may request the district court or the division of the business court of the county in which the place of arbitration is located to decide the termination. The decision of the court is not subject to appeal.

SECTION 38. Section 172.082(f), Civil Practice and Remedies Code, is amended to read as follows:

(f) If the arbitration tribunal rules as a preliminary question that it has jurisdiction, a party waives objection to the ruling unless the party, not later than the 30th day after the date the party receives notice of that ruling, requests the district court or division of the business court of the county in which the place of arbitration is located to decide the matter. The decision of the court is not subject to appeal.

SECTION 39. Section 172.172, Civil Practice and Remedies Code, is amended to read as follows:

Sec. 172.172. ASSISTANCE IN TAKING EVIDENCE. The arbitration tribunal or a party with the approval of the tribunal may request assistance from a district court or the business court in taking evidence, and the court may provide the assistance according to its rules on taking evidence. The tribunal or a party shall select the [district] court in the manner provided by Section 171.096.

SECTION 40. Sections 172.173(a) and (b), Civil Practice and Remedies Code, are amended to read as follows:

(a) If the parties to two or more arbitration agreements agree, in the respective arbitration agreements or otherwise, to consolidate the arbitrations arising out of the agreements, a district court or the business court, on application by a party with the consent of each other party to the agreements, may:

(1) order the arbitrations consolidated on terms the court considers just and necessary;

(2) if all the parties cannot agree on a tribunal for the consolidated arbitration, appoint an arbitration tribunal as provided by Section 172.055; and

(3) if all the parties cannot agree on any other matter necessary to conduct the consolidated arbitration, make any other order the court considers necessary.

(b) The arbitration tribunal or the party shall select the [district] court in the manner provided by Section 171.096.

SECTION 41. Section 172.175(a), Civil Practice and Remedies Code, is amended to read as follows:

(a) A party to an arbitration agreement may request an interim measure of protection from a district court or the business court before or during an arbitration. The party shall select the court in the manner described by Section 171.096.

SECTION 42. Section 21.010(a), Government Code, is amended to read as follows:

(a) A justice or judge, as applicable, of the supreme court, the court of criminal appeals, a court of appeals, a district court, the business court, a county court, a county court at law, or a statutory probate court may not, on the date the person takes office as a justice or judge or while serving as a justice or judge, have a significant interest in a business entity that owns, manages, or operates:

(1) a community residential facility described by Section 508.119;

(2) a correctional or rehabilitation facility subject to Chapter 244, Local Government Code; or

(3) any other facility intended to accomplish a purpose or provide a service described by Section 508.119(a) to a person convicted of a misdemeanor or felony or found to have engaged in delinquent conduct who is housed in the facility:

(A) while serving a sentence of confinement following conviction of an offense or an adjudication of delinquent conduct; or

(B) as a condition of community supervision, probation, parole, or mandatory supervision.

SECTION 43. Section 25A.001, Government Code, is amended by adding Subdivision (2-a) and amending Subdivision (14) to read as follows:

(2-a) "Fundamental business transaction" means a merger, interest exchange, conversion, or sale of all or substantially all of an entity's assets.

(14) "Qualified transaction" means a transaction, or series of related transactions other than a transaction involving a loan or an advance of money or credit by a bank, credit union, or savings and loan institution, under which a party:

(A) pays or receives, or is obligated to pay or is entitled to receive, consideration with an aggregate value of at least $5 [$10] million; or

(B) lends, advances, borrows, receives, is obligated to lend or advance, or is entitled to borrow or receive money or credit with an aggregate value of at least $5 [$10] million.

SECTION 44. Sections 25A.003(d), (g), (h), (i), (k), (l), and (m), Government Code, are amended to read as follows:

(d) The Second Business Court Division is composed of the counties composing the Second Administrative Judicial Region under Section 74.042(c), excluding Montgomery County, subject to funding through legislative appropriations. [The division is abolished September 1, 2026, unless reauthorized by the legislature and funded through additional legislative appropriations.]

(g) The Fifth Business Court Division is composed of the counties composing the Fifth Administrative Judicial Region under Section 74.042(f), subject to funding through legislative appropriations. [The division is abolished on September 1, 2026, unless reauthorized by the legislature and funded through additional legislative appropriations.]

(h) The Sixth Business Court Division is composed of the counties composing the Sixth Administrative Judicial Region under Section 74.042(g), subject to funding through legislative appropriations. [The division is abolished on September 1, 2026, unless reauthorized by the legislature and funded through additional legislative appropriations.]

(i) The Seventh Business Court Division is composed of the counties composing the Seventh Administrative Judicial Region under Section 74.042(h), subject to funding through legislative appropriations. [The division is abolished on September 1, 2026, unless reauthorized by the legislature and funded through additional legislative appropriations.]

(k) The Ninth Business Court Division is composed of the counties composing the Ninth Administrative Judicial Region under Section 74.042(j), subject to funding through legislative appropriations. [The division is abolished on September 1, 2026, unless reauthorized by the legislature and funded through additional legislative appropriations.]

(l) The Tenth Business Court Division is composed of the counties composing the Tenth Administrative Judicial Region under Section 74.042(k), subject to funding through legislative appropriations. [The division is abolished on September 1, 2026, unless reauthorized by the legislature and funded through additional legislative appropriations.]

(m) The Eleventh Business Court Division is composed of the counties composing the Eleventh Administrative Judicial Region under Section 74.042(l) and Montgomery County.

SECTION 45. Section 25A.004, Government Code, is amended by amending Subsections (a), (b), (d), (e), (f), (g), and (h) and adding Subsections (d-1) and (i) to read as follows:

(a) Subject to Subsections (b), (c), (d), (d-1), (e), and (f), the business court has the powers provided to district courts by Chapter 24, including the power to:

(1) issue writs of injunction, mandamus, sequestration, attachment, garnishment, and supersedeas; and

(2) grant any relief that may be granted by a district court.

(b) Subject to Subsection (c), the business court has civil jurisdiction concurrent with district courts in the following actions, including actions in which a district court has exclusive jurisdiction, in which the amount in controversy exceeds $5 million, excluding interest, statutory damages, exemplary damages, penalties, attorney's fees, and court costs:

(1) a derivative proceeding;

(2) an action regarding the governance, governing documents, or internal affairs of an organization;

(3) an action in which a claim under a state or federal securities or trade regulation law is asserted against:

(A) an organization;

(B) a controlling person or managerial official of an organization for an act or omission by the organization or by the person in the person's capacity as a controlling person or managerial official;

(C) an underwriter of securities issued by the organization; or

(D) the auditor of an organization;

(4) an action by an organization, or an owner of an organization, if the action:

(A) is brought against an owner, controlling person, or managerial official of the organization; and

(B) alleges an act or omission by the person in the person's capacity as an owner, controlling person, or managerial official of the organization;

(5) an action alleging that an owner, controlling person, or managerial official breached a duty owed to an organization or an owner of an organization by reason of the person's status as an owner, controlling person, or managerial official, including the breach of a duty of loyalty or good faith;

(6) an action seeking to hold an owner or governing person of an organization liable for an obligation of the organization, other than on account of a written contract signed by the person to be held liable in a capacity other than as an owner or governing person; and

(7) an action arising out of the Business Organizations Code.

(d) The business court has civil jurisdiction concurrent with district courts in the following actions in which the amount in controversy exceeds $5 [$10] million, excluding interest, statutory damages, exemplary damages, penalties, attorney's fees, and court costs:

(1) an action arising out of a qualified transaction;

(2) an action arising [that arises] out of a business, commercial, or investment contract or [commercial] transaction in which the parties to the contract or transaction agreed in the contract or a subsequent agreement that the business court has jurisdiction of the action, except an action that arises out of an insurance contract; [and]

(3) subject to Subsection (g), an action arising [that arises] out of a violation of the Finance Code or Business & Commerce Code by an organization or an officer or governing person acting on behalf of an organization other than a bank, credit union, or savings and loan association;

(4) an action arising out of or relating to the ownership, use, licensing, lease, installation, or performance of intellectual property, including:

(A) computer software, software applications, information technology and systems, data and data security, pharmaceuticals, biotechnology products, and bioscience technologies; and

(B) a trade secret, as that term is defined in Section 134A.002, Civil Practice and Remedies Code; and

(5) an action arising out of Chapter 134A, Civil Practice and Remedies Code.

(d-1) The business court has civil jurisdiction concurrent with district courts in an action to enforce an arbitration agreement, appoint an arbitrator, or review an arbitral award, or in other judicial actions authorized by an arbitration agreement, Chapter 171 or 172, Civil Practice and Remedies Code, or the Federal Arbitration Act (9 U.S.C. Sections 1 through 16), if a claim included in the controversy in arbitration is described by Subsection (b) or (d), regardless of the amount in controversy.

(e) The business court has civil jurisdiction concurrent with district courts in an action seeking only injunctive relief or a declaratory judgment under Chapter 37, Civil Practice and Remedies Code, or other equitable relief involving a dispute based on a claim within the court's jurisdiction under Subsection (b)(2), (4), (5), or (7) [(b), (c), or (d)].

(f) Except as provided by Subsection (h), in an action in which the business court has jurisdiction under Subsection (b), (c), (d), or (e), the court has supplemental jurisdiction over any other claim so related to the action [a case or controversy within the court's jurisdiction] that the claim forms part of the same case or controversy. The court's supplemental jurisdiction includes a claim that requires the joinder or intervention of an additional party. [A claim within the business court's supplemental jurisdiction may proceed in the business court only on the agreement of all parties to the claim and a judge of the division of the court before which the action is pending.] If [the parties involved in] a claim within the business court's supplemental jurisdiction does not proceed [do not agree on the claim proceeding] in the business court, the claim may proceed in a court of original jurisdiction concurrently with any related claims proceeding in the business court.

(g) Unless the claim falls within the business court's supplemental jurisdiction, the business court does not have jurisdiction of:

(1) a claim in a civil action:

(A) brought by or against a governmental entity; or

(B) seeking to foreclose on a lien on real or personal property an individual owns at the time the action is filed;

(2) a claim arising out of:

(A) Subchapter E, Chapter 15, and Chapter 17, Business & Commerce Code, other than a claim described by Subsection (b)(9)(B);

(B) the Estates Code;

(C) the Family Code; or

(D) [the Insurance Code; or

[(E)] Chapter 53 and Title 9, Property Code;

(3) a claim arising out of the production or sale of a farm product, as that term is defined by Section 9.102, Business & Commerce Code; or

(4) [a claim related to a consumer transaction, as that term is defined by Section 601.001, Business & Commerce Code, to which a consumer in this state is a party, arising out of a violation of federal or state law; or

[(5)] a claim related to the duties and obligations under an insurance policy.

(h) The business court does not have jurisdiction of the following claims regardless of whether the claim is otherwise within the court's supplemental jurisdiction under Subsection (f):

(1) a claim arising under Chapter 74, Civil Practice and Remedies Code;

(2) a claim in which a party seeks recovery of monetary damages for bodily injury or death; [or]

(3) a claim of legal malpractice; or

(4) a claim related to a consumer transaction, as that term is defined by Section 601.001, Business & Commerce Code, to which a consumer in this state is a party, arising out of a violation of federal or state law.

(i) The amount in controversy for jurisdictional purposes under Subsection (b) or (d) is the total amount of all joined parties' claims.

SECTION 46. Chapter 25A, Government Code, is amended by adding Section 25A.0041 to read as follows:

Sec. 25A.0041. RULES RELATED TO JURISDICTIONAL DETERMINATION. (a) The supreme court by rule shall establish procedures for the prompt, efficient, and final determination of business court jurisdiction on the filing of an action in the business court. In adopting rules under this section, the supreme court must consider:

(1) the business court's purpose of efficiently addressing complex business litigation in a manner comparable to or more effective than the business and commercial courts operating in other states;

(2) the commonalities of law and procedure existing between the business court and district courts as trial courts functioning under the Texas Constitution and within the judicial branch of this state;

(3) the limited potential for the movement of an action between a district court and the business court as it relates to issues of fundamental fairness or the preservation of constitutionally or statutorily protected rights of the parties; and

(4) the need for guidance on evolving usage of the business court and the Fifteenth Court of Appeals over time by business litigants and their counsel as the courts develop a body of precedent and practice.

(b) In adopting rules under this section, the supreme court may:

(1) provide for jurisdictional determinations based on pleadings or summary proceedings;

(2) establish appropriate standards of proof;

(3) establish limited periods during which issues or rights must be asserted, considered agreed to, or waived;

(4) establish procedures for the review of jurisdictional determinations by the business court by another judge or panel of judges, including a regional presiding judge or the administrative presiding judge of the business court;

(5) allow, require, or prohibit interlocutory appeals;

(6) provide for accelerated appeals; or

(7) provide for any other procedures necessary for the prompt, efficient, and final determination of business court jurisdiction.

SECTION 47. Section 25A.006(a), Government Code, is amended to read as follows:

(a) An action within the jurisdiction of the business court may be filed in the business court. The party filing the action must plead facts to establish venue in a county in a division of the business court, and the business court shall assign the action to that division. Venue may be established as provided by:

(1) law;

(2) a party's governing documents in an action described by Section 25A.004(b)(2), (4), (5), or (7); or

(3) [, if] a written contract, if the contract specifies a county as venue for the action[, as provided by the contract].

SECTION 48. Section 25A.007(a), Government Code, is amended to read as follows:

(a) Notwithstanding any other law, and except [as provided by Subsection (b) and] in instances when the supreme court has concurrent or exclusive jurisdiction, the Fifteenth Court of Appeals has exclusive jurisdiction over an appeal from an order or judgment of the business court or an original proceeding related to an action or order of the business court.

SECTION 49. Section 25A.009, Government Code, is amended by amending Subsections (a) and (d) and adding Subsections (a-1) and (d-1) to read as follows:

(a) The governor, with the advice and consent of the senate, shall appoint:

(1) two judges to each of the First, Third, Fourth, Eighth, and Eleventh Divisions of the business court; [and]

(2) one judge to each of the Second, Fifth, Sixth, Seventh, Ninth, and Tenth Divisions of the business court; and

(3) one additional judge to each of the First and Eleventh Divisions of the business court, if the legislature makes a specific appropriation of money for that purpose.

(a-1) A judge appointed to the business court may begin state employment and receive compensation for service as a judge for not more than 30 days before the beginning of the judge's term to allow time for training, organization of staff and chambers, and study of business court precedent, procedure, and pending cases.

(d) Not later than September 15 of each even-numbered year [the seventh day after the first day of a term], the business court judges by majority vote shall select a judge of the court to serve as administrative presiding judge and a judge serving a different division of the court to serve as administrative presiding judge pro tempore for a term of two years [for the duration of the term]. If a vacancy occurs in the position of administrative presiding judge, the administrative presiding judge pro tempore shall serve as administrative presiding judge and the remaining business court judges by majority vote shall select a judge of the court to serve as successor administrative presiding judge pro tempore for the remainder of the unexpired term as soon as practicable.

(d-1) The administrative presiding judge pro tempore shall act as administrative presiding judge in any matter in which the administrative presiding judge:

(1) has delegated the judge's official duties to the administrative presiding judge pro tempore; or

(2) is unable to perform the judge's official duties.

SECTION 50. Chapter 25A, Government Code, is amended by adding Section 25A.00111 to read as follows:

Sec. 25A.00111. JUDGE'S EXPENSES; OFFICIAL DUTIES. (a) A business court judge engaged in the discharge of official duties in a location other than the county in which the judge maintains chambers is entitled to travel expenses as provided by Chapter 660.

(b) A business court judge is entitled to receive from this state the actual and necessary postage, telephone, and telecommunications expenses incurred in the discharge of the judge's official duties.

(c) The official duties of a business court judge include:

(1) presenting educational information regarding the business court to legal and business groups; and

(2) attending educational meetings in this state and other states of the United States relating to business law, business litigation, and the function of the business court.

SECTION 51. Section 25A.012, Government Code, is amended by adding Subsections (c) and (d) to read as follows:

(c) If a business court judge determines on the judge's own motion the judge should not hear a case pending in the judge's court because the judge is disqualified or subject to recusal, the judge shall:

(1) enter a recusal order;

(2) request the presiding judge of the business court to assign another judge of the business court to hear the case; and

(3) take no further action in the case except for good cause as stated in the order in which the action is taken.

(d) The administrative presiding judge is not required to assign a case described by Subsection (c) to a different division of the business court.

SECTION 52. Chapter 25A, Government Code, is amended by adding Section 25A.0135 to read as follows:

Sec. 25A.0135. EXEMPTION FROM CERTAIN JUDICIAL TRAINING REQUIREMENTS. A judge of the business court is exempt from the judicial training requirements under Chapter 22 that are not germane to the jurisdiction of the business court, including the training requirements of Sections 22.012 and 22.110.

SECTION 53. Section 25A.014, Government Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a) An active, [A] retired, or former judge or justice who has the qualifications prescribed by Section 25A.008 may be assigned as a visiting judge of a division of the business court by the chief justice of the supreme court. A visiting judge of a division of the business court is subject to objection, disqualification, or recusal under Chapter 74 in the same manner as a [retired or former] judge or justice is subject to objection, disqualification, or recusal if appointed as a visiting district judge.

(c) The chief justice of the supreme court may assign an active judge of the business court to serve as a visiting judge of a district court, a constitutional county court, or a statutory county court located in the division served by the judge of the business court. The judge of the business court serving as a visiting judge is subject to objection, disqualification, or recusal under Chapter 74 in the same manner as an active judge or justice or an active district court judge is subject to objection, disqualification, or recusal if appointed as a visiting judge.

SECTION 54. Sections 25A.017(c), (d), and (h), Government Code, are amended to read as follows:

(c) Each business court judge shall maintain chambers in the county with the largest population within the geographic boundaries of the division to which the judge is appointed, or in a county adjacent to that county and within the geographic boundaries of the division, as the judge selects, [within the geographic boundaries of the division to which the judge is appointed] in facilities provided by this state. The chief justice of the supreme court may approve the location of a business court judge's chambers in a county other than a county described by this subsection that is within the geographic boundaries of the division. For purposes of this section, the Office of Court Administration of the Texas Judicial System may contract for the use of facilities with a public or private party [county].

(d) Subject to Section 25A.015, a business court judge may hold court at any courtroom within the geographic boundaries of the division to which the judge is appointed as the court determines necessary or convenient for a particular civil action. A [To the extent practicable, a] county [using existing courtrooms and facilities] shall accommodate the business court in the conduct of the court's hearings and other proceedings in courtrooms and facilities equivalent to those provided to district courts. A county may seek reimbursement from this state in an amount equal to the market rate for those facilities in the county as calculated by the Texas Facilities Commission for this purpose. A county shall include the reasonably anticipated requirements of the business court in the planning for and implementation of additions and improvements to the county's courtrooms and facilities.

(h) In a county in which a division of the business court sits or a judge of the business court maintains chambers, the business court or Office of Court Administration of the Texas Judicial System may require [,] the sheriff, sheriff's deputy, or other licensed peace officer employed by the state or local governmental entity, including the Department of Public Safety, to [shall in person or by deputy] attend the business court and provide security for the business court's judges [as required by the court]. The officers providing such services are [sheriff or deputy is] entitled to reimbursement from this state for the cost of attending the business court and providing security for the business court's judges.

SECTION 55. Section 25A.0171(e), Government Code, is amended to read as follows:

(e) Not later than December 1 of each year, the Office of Court Administration of the Texas Judicial System shall submit to the legislature a report on the case activity of [number and types of cases heard by] the business court in the preceding year that includes:

(1) a summary of the caseload of each business court judge in the preceding year;

(2) a summary of the extent to which business court judges have been assigned to hear cases in other divisions to equalize caseloads;

(3) a projection of the expected caseloads of the business court judges for the following two years; and

(4) recommendations regarding action by the legislature, the governor, the chief justice of the supreme court, or the business court to ensure the business court meets existing and projected demand for the business court's services in the following two years.

SECTION 56. Chapter 25A, Government Code, is amended by adding Section 25A.021 to read as follows:

Sec. 25A.021. ACTIONS COMMENCED BEFORE SEPTEMBER 1, 2024. (a) Notwithstanding Section 8, Chapter 380 (H.B. 19), Acts of the 88th Legislature, Regular Session, 2023, 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 business court on an agreed motion of a party and permission of the business court under rules adopted by the supreme court for the purpose. When adopting rules under this section, the supreme court shall:

(1) prioritize complex civil actions of longer duration that have proven difficult for a district court to resolve because of the other demands on the district court's caseload;

(2) consider the capacity of the business court to accept the transfer of the action without impairing the business court's efficiency and effectiveness in resolving actions commenced on or after September 1, 2024; and

(3) ensure the facilitation of the fair and efficient administration of justice.

(b) This section expires September 1, 2035.

SECTION 57. Section 37.001(a), Government Code, is amended to read as follows:

(a) This chapter applies to a court in this state, other than the business court, created by the Texas Constitution, by statute, or as authorized by statute that is located in a county with a population of 25,000 or more.

SECTION 58. Section 39.001, Government Code, is amended to read as follows:

Sec. 39.001. APPLICABILITY. This chapter applies to a person elected to or holding any of the following judicial offices:

(1) chief justice or justice of the supreme court;

(2) presiding judge or judge of the court of criminal appeals;

(3) chief justice or justice of a court of appeals;

(4) district judge, including a criminal district judge; [and]

(5) business court judge; and

(6) judge of a statutory county court.

SECTION 59. Section 71.011, Government Code, is amended to read as follows:

Sec. 71.011. NUMBER AND CLASSES OF MEMBERS. The Texas Judicial Council is an agency of the state composed of 17 [16] ex officio and six appointive members.

SECTION 60. Section 71.012, Government Code, is amended to read as follows:

Sec. 71.012. EX OFFICIO MEMBERS. The ex officio members are:

(1) the chief justice of the supreme court;

(2) the presiding judge of the court of criminal appeals;

(3) two members of the senate, appointed by the lieutenant governor;

(4) the chair of the House Judicial Affairs Committee;

(5) one member of the house of representatives, appointed by the speaker of the house;

(6) two justices of the courts of appeals designated by the chief justice of the supreme court;

(7) two district judges designated by the chief justice of the supreme court;

(8) two judges of county courts, statutory county courts, or statutory probate courts designated by the chief justice of the supreme court;

(9) two justices of the peace designated by the chief justice of the supreme court; [and]

(10) two municipal court judges designated by the chief justice of the supreme court; and

(11) the administrative presiding judge of the business court.

SECTION 61. Section 71.013, Government Code, is amended by amending Subsection (b) and adding Subsection (g) to read as follows:

(b) Except as provided by Subsections [Subsection] (a) and (g), all members of the judiciary appointed to the council serve staggered terms of four years with the term of one member from each judicial group expiring on February 1 of each odd-numbered year.

(g) The administrative presiding judge of the business court is an ex officio member of the council while the judge holds the office of administrative presiding judge of the business court.

SECTION 62. Section 74.003(b), Government Code, is amended to read as follows:

(b) The chief justice of the supreme court may assign a qualified former or retired justice or judge of the supreme court, of the court of criminal appeals, or of a court of appeals to a court of appeals for active service regardless of whether a vacancy exists in the court to which the justice or judge is assigned. To be eligible for assignment under this subsection, a former or retired justice or judge must:

(1) have served as an active justice or judge for at least 96 months in a district court, a statutory probate court, a statutory county court, an [or] appellate court, or the business court, with at least 48 of those months in an appellate court;

(2) not have been removed from office;

(3) certify under oath to the chief justice of the supreme court, on a form prescribed by the chief justice, that:

(A) the justice or judge has never been publicly reprimanded or censured by the State Commission on Judicial Conduct; and

(B) the justice or judge:

(i) did not resign or retire from office after the State Commission on Judicial Conduct notified the justice or judge of the commencement of a full investigation into an allegation or appearance of misconduct or disability of the justice or judge as provided in Section 33.022 and before the final disposition of that investigation; or

(ii) if the justice or judge did resign from office under circumstances described by Subparagraph (i), the justice or judge was not publicly reprimanded or censured as a result of the investigation;

(4) annually demonstrate that the justice or judge has completed in the past state fiscal year the educational requirements for active appellate court justices or judges; and

(5) certify to the chief justice of the supreme court a willingness not to appear and plead as an attorney in any court in this state for a period of two years.

SECTION 63. Section 74.041(5), Government Code, is amended to read as follows:

(5) "Former judge" means a person who has served as an active judge in a district court, a statutory probate court, a statutory county court, an [or] appellate court, or the business court, but who is not a retired judge.

SECTION 64. Section 74.045(a), Government Code, is amended to read as follows:

(a) A presiding judge must be at the time of appointment:

(1) a regularly elected or retired district judge;

(2) a serving or retired business court judge;

(3) a former judge with at least 12 years of service as a district judge or business court judge; or

(4) [(3)] a retired appellate judge with judicial experience on a district court.

SECTION 65. Section 74.055(c), Government Code, is amended to read as follows:

(c) To be eligible to be named on the list, a retired or former judge must:

(1) have served as an active judge for at least 96 months in a district court, a statutory probate court, a statutory county court, an [or] appellate court, or the business court;

(2) have developed substantial experience in the judge's area of specialty;

(3) not have been removed from office;

(4) certify under oath to the presiding judge, on a form prescribed by the state board of regional judges, that:

(A) the judge has never been publicly reprimanded or censured by the State Commission on Judicial Conduct; and

(B) the judge:

(i) did not resign or retire from office after the State Commission on Judicial Conduct notified the judge of the commencement of a full investigation into an allegation or appearance of misconduct or disability of the judge as provided in Section 33.022 and before the final disposition of that investigation; or

(ii) if the judge did resign from office under circumstances described by Subparagraph (i), was not publicly reprimanded or censured as a result of the investigation;

(5) annually demonstrate that the judge has completed in the past state fiscal year the educational requirements for active district, business, statutory probate, and statutory county court judges; and

(6) certify to the presiding judge a willingness not to appear and plead as an attorney in any court in this state for a period of two years.

SECTION 66. Section 74.141, Government Code, is amended to read as follows:

Sec. 74.141. DEFENSE OF JUDGES. The attorney general shall defend a state district judge, a business court judge, a presiding judge of an administrative region, the presiding judge of the statutory probate courts, a visiting judge assigned to hear a guardianship or probate matter by the presiding judge of the statutory probate courts, or an active, retired, or former judge assigned under this chapter in any action or suit in any court in which the judge is a defendant because of the judge's office or capacity as judge if the judge requests the attorney general's assistance in the defense of the suit.

SECTION 67. Section 74.162, Government Code, is amended to read as follows:

Sec. 74.162. TRANSFER OF CASES BY PANEL. Subject to Section 74.1625 and notwithstanding any other law, the judicial panel on multidistrict litigation may transfer civil actions involving one or more common questions of fact pending in the same or different constitutional courts, county courts at law, probate courts, [or] district courts, or the business court to any district court or to the business court if the business court has jurisdiction for consolidated or coordinated pretrial proceedings, including summary judgment or other dispositive motions, but not for trial on the merits. A transfer may be made by the judicial panel on multidistrict litigation on its determination that the transfer will:

(1) be for the convenience of the parties and witnesses; and

(2) promote the just and efficient conduct of the actions.

SECTION 68. Section 411.171(4-b), Government Code, is amended to read as follows:

(4-b) "State judge" means:

(A) the judge of an appellate court, a district court, the business court, or a county court at law of this state;

(B) an associate judge appointed under Chapter 201, Family Code; or

(C) a justice of the peace.

SECTION 69. Section 659.012, Government Code, is amended by adding Subsections (a-1) and (d-1) to read as follows:

(a-1) In addition to the annual base salary from the state prescribed by Subsection (a), a judge of a division of the business court is entitled to an annual salary supplement from the state in an amount equal to the difference between the judge's annual base salary from the state and the maximum combined base salary from all state and county sources paid to a district judge under Subsection (a).

(d-1) Notwithstanding any other provision in this section or other law, a business court judge who serves as administrative presiding judge under Section 25A.009 is entitled to an annual base salary from the state in the amount equal to $5,000 more than the maximum salary from the state to which the judge is otherwise entitled under Subsections (a) and (a-1).

SECTION 70. The following provisions of the Government Code are repealed:

(1) Section 25A.003(n);

(2) Section 25A.007(b);

(3) Section 25A.009(b); and

(4) Section 25A.014(b).

SECTION 71. The governor shall appoint one additional judge to each of the First and Eleventh Business Court Divisions, as required by Section 25A.009, Government Code, as amended by this Act.

SECTION 72. Except as provided by Section 25A.021, Government Code, as added by this Act, the changes in law made by this Act apply only to civil actions commenced on or after September 1, 2024.

SECTION 73. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2025.