Insight

House Bill 40 Approved by the Texas Legislature—Expanding Business Court Jurisdiction and Operations

Client Alerts

As an update to Vinson & Elkins’ prior coverage of House Bill 40 (“H.B. 40”)—new legislation that expands the jurisdiction and operations of the recently opened Texas business courts—both houses of the Texas Legislature approved H.B. 40 on June 2, 2025. Though no changes were made to the foundational jurisdiction-expanding purpose of the legislation since its approval by the House on May 13, 2025, the final version was passed with a number of notable amendments, including:

  • Reinstating the more restrictive requirements on the business court’s supplemental jurisdiction. The House version of H.B. 40 loosened the requirements governing the business court’s supplemental jurisdiction—i.e., a court’s jurisdiction over claims it would not normally have jurisdiction over but that form part of the same case or controversy as an action it does have jurisdiction over. In particular, the House version (1) added that the business court’s supplemental jurisdiction includes a claim that requires the joinder or intervention of an additional party; and (2) removed the requirement that the parties to the claim and the presiding judge need to all agree that supplemental jurisdiction should be exercised. The final version reverted both of these changes and held the business court’s supplemental jurisdiction to its currently restricted form.
  • Removing the addition of an extra judge for the First and Eleventh Divisions. The House version of H.B. 40 required the addition of one extra judge each for the First and Eleventh Divisions of the business court—covering the areas including Dallas and Houston, respectively. The final version removed this addition for both divisions.
  • Allowing for the transfer of pre-September 1, 2024 cases to the Business Court. The final version of H.B. 40 includes a provision allowing for cases filed prior to September 1, 2024 to be transferred to the Business Court when the parties and the Business Court agree. The bill requires that such transfer comply with rules to be adopted by the Texas Supreme Court governing these transfers.

Though H.B. 40 awaits Governor Abbot’s signature to be enacted, his signature is expected in the following days. However, even when enacted, H.B. 40 will not take effect until September 1, 2025. This transitional period will allow businesses to take stock of—and seek the advice of experienced counsel on—the changes mandated by H.B. 40 going forward.

Update: On June 20, 2025, Governor Abbott signed H.B. 40, enacting the bill into law.


This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.

Discover our latest:

Insights

Events

Jenny Speck to Speak at Lockton U.S. Energy Risk Summit

Partner Jenny Speck will speak at Lockton’s U.S. Energy Risk Summit on November 12, 2026, in Houston, Texas. The summit …

November 12, 2026

November 12, 2026 • 1-minute read

CLE Events

Sixth Annual Navigating the Annual Meeting and Reporting Season 

Join leading practitioners and industry voices for a timely discussion of the legal, regulatory, and governance developments shaping the next proxy season.

November 11, 2026

November 11, 2026 • 2-minute read

Navigating Series Background Decorative Image

Client Alerts

After the Midterms: Preparing for a New Era of Congressional Oversight

Following the November 2026 midterm elections, Democrats will control both the House and the Senate when the 120th Congress convenes …

November 5, 2026

November 5, 2026 • 5-minute read

Client Alerts

Texas Business Court Quarterly Update – 2026 Q3 Summaries

In the third quarter of 2026, the Texas Business Court continued its progress on an ever-growing docket, issuing a number …

November 4, 2026

November 4, 2026 • 44-minute read

Client Alerts

Fifth Circuit Rejects CFIUS Preemption Challenge to Texas’s Lone Star Infrastructure Protection Act

On October 16, 2026, the United States Court of Appeals for the Fifth Circuit issued its decision in GH America …

November 3, 2026

November 3, 2026 • 9-minute read

National Security Reviews (CFIUS) Background Decorative Image
News & Achievements
V&E

Get in Touch

Thoughts or questions? Send us a note, and we’ll connect you with the right person.

The ESG GC: How Your Role as Chief Legal Officer is Integral To Your Company’s ESG Efforts Background Image