Honorable Bryan Hughes, Chair, Senate Committee on Jurisprudence
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB40 by Landgraf (Relating to the business court.), As Engrossed
Estimated Two-year Net Impact to General Revenue Related Funds for HB40, As Engrossed: a negative impact of ($23,603,631) through the biennium ending August 31, 2027.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
($14,525,812)
2027
($9,077,819)
2028
($9,077,819)
2029
($9,077,819)
2030
($9,077,819)
All Funds, Five-Year Impact:
Fiscal Year
Probable (Cost) from General Revenue Fund 1
Probable (Cost) from Judicial Fund 573
Probable (Cost) from Other Special State Funds 998
Change in Number of State Employees from FY 2025
2026
($14,525,812)
($49,593)
($11,261)
40.0
2027
($9,077,819)
($49,593)
($11,261)
40.0
2028
($9,077,819)
($49,593)
($11,261)
40.0
2029
($9,077,819)
($49,593)
($11,261)
40.0
2030
($9,077,819)
($49,593)
($11,261)
40.0
Fiscal Analysis
The bill would amend Government Code, Civil
Practices and Remedies Code, and Chapter 380 of Acts of the 88th Legislature
related to the administration, operations, jurisdiction, and processes of the business courts.
The bill would authorize six new business courts. The Second, Fifth, Sixth, Seventh, Ninth, and Tenth.
The bill
would reduce the threshold of certain disputes eligible for business court
consideration from $10.0 million to $5.0 million and would expand the list of actions over
which the business courts have civil jurisdiction concurrent with district courts.
The bill would entitle business court judges to
reimbursement from the state for travel and certain other expenses.
The bill
would also add one new judge to each the First and Eleventh business courts. The bill would require the compensation
for the administrative presiding judge of the business court be equal to the
additional compensation provided to a district judge who serves as local
administrative judge in a county with more than five district courts, which is
$5,000.
The bill
would entitle a county to seek reimbursement from the state for business court accommodations, including for security costs, in county facilities.
The bill
would require the state to provide additional compensation to business court
judges equal to the maximum amount a district court judge may be paid as
supplemental compensation by a county, or $18,000 per fiscal year.
Methodology
Costs assumed by this analysis that are reflected in the table above are based on information provided by the Office of Court Administration (OCA) and the Comptroller of Public Accounts.
The authorization of six new business courts includes six judges. In addition, two judges would be added to the previously authorized First and Eleventh business courts, for a total of eight new judges in the 2026-27 biennium.
Each of the eight new judges would be entitled to the maximum county supplement of $18,000 in addition to their $140,000 base salary. The administrative presiding judge of the business court would be entitled to $5,000 in additional compensation on par with the amount provided to a local administrative judge in a county with more than five district courts. The total amount required for eight new judges, including the supplements, is $1,269,000 each fiscal year.
Based on information provided by OCA, court staff, operating expenses, and capital expenses are based on costs associated with establishing the first five business courts in the 2024-25 biennium. OCA reports the additional judge appointed to the First business court would have space in the current property, but the Eleventh business court location will not have space to accommodate the additional judge. Therefore, this analysis assumes a new location for the Eleventh division court will be necessary.
OCA would require $11,793,728 in General Revenue in fiscal year 2026 and $6,345,735 in fiscal year 2027 and 32.0 FTEsto implement the provisions of the bill. This includes a biennial total of $2,055,000 in capital costs for courtroom and office buildouts, $9,168,923 for other operating expenses, and $6,915,540 for salaries for 6.0 court reporters, 8.0 court law clerks, 1.0 deputy clerk, 8.0 executive assistants, 8.0 staff attorneys, and 1.0 project manager.
Benefits include the 19.25 percent state contribution to the Judicial Retirement System Plan 2 of $216,563 each fiscal year in All Funds as well as state contributions for the ERS retirement plan, social security, and agency payroll contributions for retirement and health insurance of $1,307,375 each fiscal year in All Funds.
Technology
These costs include technology impacts of $696,209 in fiscal year 2026 and $43,652 in fiscal year 2027 for OCA to purchase computer equipment, video conferencing equipment, switches, routers, cabling, WiFi, and internet for the new locations.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
212 Office of Court Administration, Texas Judicial Council, 300 Trusteed Programs Within the Office of the Governor, 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 327 Employees Retirement System, 405 Department of Public Safety