Hughes Bill Opens Business Court To $4.5M Disputes

The text as introduced · 1,140 words

89R16720 AMF-D

By: Hughes
S.B. No. 2883

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. Sections 25A.003(d), (g), (h), (i), (k), (l),

and (n), 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), subject to funding through legislative

appropriations. The division is abolished September 1, 2028 [ 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, 2028

[ 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, 2028

[ 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, 2028

[ 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, 2028

[ 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, 2028

[ 2026 ], unless reauthorized by the legislature and funded through

additional legislative appropriations.

(n) This subsection and Subsections (d), (g), (h), (i), (k),

and (l) expire September 1, 2028 [ 2026 ].

SECTION 2. Sections 25A.004(b) and (d), Government Code,

are amended to read as follows:

(b) Subject to Subsection (c), the business court has civil

jurisdiction concurrent with district courts in the following

actions in which the amount in controversy exceeds $4.5 [ $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 $9.5 [ $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 that arises out of a 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 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.

SECTION 3. Section 25A.008(a), Government Code, is amended

to read as follows:

(a) A business court judge must:

(1) be at least 35 years of age;

(2) be a United States citizen;

(3) have been a resident of a county within the

division of the business court to which the judge is appointed for

at least four [ five ] years before appointment; and

(4) be a licensed attorney in this state who has 10 or

more years of experience in:

(A) practicing complex civil business

litigation;

(B) practicing business transaction law;

(C) serving as a judge of a court in this state

with civil jurisdiction; or

(D) any combination of experience described by

Paragraphs (A)-(C).

SECTION 4. Section 25A.0171(e), Government Code, is amended

to read as follows:

(e) Not later than December 15 [ 1 ] of each year, the Office

of Court Administration of the Texas Judicial System shall submit

to the legislature a report on the number and types of cases heard

by the business court in the preceding year.

SECTION 5. Section 659.012(d), Government Code, is amended

to read as follows:

(d) Notwithstanding any other provision in this section or

other law :

(1) [ , ] in a county with more than five district courts,

a district judge who serves as a local administrative district

judge under Section 74.091 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

Subsection (a) or (b) ; and

(2) 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 $1 more

than the maximum salary from the state to which the judge is

otherwise entitled under Subsection (a) or (b) .

SECTION 6. Section 25A.007(b), Government Code, is

repealed.

SECTION 7. This Act takes effect September 1, 2025.