Texas 2023 - 88th Regular

Texas Senate Bill SB27 Compare Versions

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1	1	88R6271 AMF-F
2	2	By: Hughes S.B. No. 27
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the creation of a specialty trial court to hear certain
8	8	cases; authorizing fees.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subtitle A, Title 2, Government Code, is amended
11	11	by adding Chapter 24A to read as follows:
12	12	CHAPTER 24A. BUSINESS COURT
13	13	Sec. 24A.001. DEFINITIONS. In this chapter:
14	14	(1) "Controlling person" means a person who directly
15	15	or indirectly controls a governing person, officer, or
16	16	organization.
17	17	(2) "Governing documents" means the instruments,
18	18	documents, or agreements adopted under an organization's governing
19	19	law to govern the organization's formation and internal affairs.
20	20	The term includes:
21	21	(A) a certificate of formation, articles of
22	22	incorporation, and articles of organization;
23	23	(B) bylaws;
24	24	(C) a partnership agreement;
25	25	(D) a company agreement or operating agreement;
26	26	(E) a shareholder agreement;
27	27	(F) a voting agreement or voting trust agreement;
28	28	and
29	29	(G) an agreement among owners restricting the
30	30	transfer of ownership interests.
31	31	(3) "Governing law" means the law governing the
32	32	formation and internal affairs of an organization.
33	33	(4) "Governing person" means a person who is entitled,
34	34	alone or as part of a group, to manage and direct an organization's
35	35	affairs under the organization's governing documents and governing
36	36	law. The term includes:
37	37	(A) a member of the board of directors of a
38	38	corporation or other organization;
39	39	(B) a general partner of a general or limited
40	40	partnership;
41	41	(C) a manager of a limited liability company that
42	42	is managed by its managers;
43	43	(D) a member of a limited liability company that
44	44	is managed by its members;
45	45	(E) a trust manager of a real estate investment
46	46	trust; and
47	47	(F) a trustee of a business trust.
48	48	(5) "Governmental entity" means:
49	49	(A) this state; or
50	50	(B) a political subdivision of this state,
51	51	including a municipality, a county, or any kind of district.
52	52	(6) "Internal affairs" means:
53	53	(A) the rights, powers, and duties of an
54	54	organization's governing persons, officers, owners, and members;
55	55	and
56	56	(B) matters relating to the organization's
57	57	membership or ownership interests.
58	58	(7) "Managerial official" means a governing person or
59	59	officer.
60	60	(8) "Officer" means a person elected, appointed, or
61	61	designated as an officer of an organization by the organization's
62	62	governing persons or governing documents.
63	63	(9) "Organization" means a foreign or domestic entity
64	64	or association, regardless of whether the organization is for
65	65	profit or nonprofit. The term includes:
66	66	(A) a corporation;
67	67	(B) a limited partnership;
68	68	(C) a general partnership;
69	69	(D) a limited liability partnership;
70	70	(E) a limited liability company;
71	71	(F) a business trust;
72	72	(G) a real estate investment trust;
73	73	(H) a joint venture;
74	74	(I) a joint stock company;
75	75	(J) a cooperative;
76	76	(K) a bank;
77	77	(L) a credit union;
78	78	(M) a savings and loan association;
79	79	(N) an insurance company; and
80	80	(O) a series of a limited liability company or of
81	81	another entity.
82	82	(10) "Owner" means an owner of an organization. The
83	83	term includes:
84	84	(A) a shareholder or stockholder of a corporation
85	85	or other organization;
86	86	(B) a general or limited partner of a partnership
87	87	or an assignee of a partnership interest in a partnership;
88	88	(C) a member of, or an assignee of a membership
89	89	interest in, a limited liability company; and
90	90	(D) a member of a nonprofit organization.
91	91	(11) "Ownership interest" means an owner's interest in
92	92	an organization, including an owner's economic, voting, and
93	93	management rights.
94	94	(12) "Qualified transaction" has the meaning assigned
95	95	by Section 271.001, Business & Commerce Code.
96	96	Sec. 24A.002. BUSINESS COURT JUDICIAL DISTRICT. The
97	97	Business Court Judicial District is composed of all counties in
98	98	this state.
99	99	Sec. 24A.003. JURISDICTION AND POWERS. (a) Subject to
100	100	Subsections (b) and (c), the business court for the Business Court
101	101	Judicial District has the jurisdiction provided to a district court
102	102	by Section 8, Article V, Texas Constitution, and the jurisdiction
103	103	and powers provided to district courts by Chapter 24, including the
104	104	power to:
105	105	(1) issue writs of injunction, mandamus,
106	106	sequestration, attachment, garnishment, and supersedeas; and
107	107	(2) grant any relief that may be granted by a district
108	108	court.
109	109	(b) The business court has within its district civil
110	110	jurisdiction concurrent with district courts in:
111	111	(1) a derivative action on behalf of an organization;
112	112	(2) an action arising out of or relating to a qualified
113	113	transaction in which the amount in controversy exceeds $10 million,
114	114	excluding interest, statutory damages, exemplary damages,
115	115	penalties, attorney's fees, and costs;
116	116	(3) an action regarding the governance or internal
117	117	affairs of an organization;
118	118	(4) an action in which a claim under a state or federal
119	119	securities or trade regulation law is asserted against:
120	120	(A) an organization;
121	121	(B) a governing or controlling person or officer
122	122	of an organization for an act or omission by the organization or by
123	123	the person in the person's capacity as a governing person; or
124	124	(C) an underwriter of securities issued by the
125	125	organization or the auditor of an organization;
126	126	(5) an action by an organization, or an owner or a
127	127	member of an organization, if the action:
128	128	(A) is brought against an owner, managerial
129	129	official, or controlling person of the organization; and
130	130	(B) alleges an act or omission by the person in
131	131	the person's capacity as an owner, managerial official, or
132	132	controlling person of the organization;
133	133	(6) an action alleging that an owner, managerial
134	134	official, or controlling person breached a duty by reason of the
135	135	person's status as an owner, managerial official, or controlling
136	136	person, including the duty of care, loyalty, or good faith;
137	137	(7) an action seeking to hold an owner, member, or
138	138	governing person of an organization liable for an obligation of the
139	139	organization, other than on account of a written contract signed by
140	140	the person to be held liable in a capacity other than as an owner,
141	141	member, or governing person;
142	142	(8) an action in which the amount in controversy
143	143	exceeds $10 million, excluding interest, statutory damages,
144	144	exemplary damages, penalties, attorney's fees, and costs, that:
145	145	(A) arises against, between, or among
146	146	organizations, governing authorities, governing persons, members,
147	147	or owners, relating to a contract transaction for business,
148	148	commercial, investment, agricultural, or similar purposes; or
149	149	(B) involves violations of the Finance Code or
150	150	Business & Commerce Code;
151	151	(9) an action seeking a declaratory judgment or
152	152	injunctive relief brought under Chapter 37, Civil Practice and
153	153	Remedies Code, involving:
154	154	(A) the Business Organizations Code;
155	155	(B) an organization's governing documents; or
156	156	(C) a dispute based on claims that fall within
157	157	the provisions of this subsection; and
158	158	(10) an action arising out of the Business
159	159	Organizations Code.
160	160	(c) The business court does not have jurisdiction of:
161	161	(1) a civil action brought by or against a
162	162	governmental entity, unless the governmental entity invokes or
163	163	consents to the jurisdiction of the business court; or
164	164	(2) any claim in which a party seeks recovery of
165	165	monetary damages for personal injury or death or any claim arising
166	166	under Chapter 17, Business & Commerce Code, the Estates Code, the
167	167	Family Code, or Title 9, Property Code, unless all parties and a
168	168	judge of the business court agree that the claim may proceed in the
169	169	business court.
170	170	Sec. 24A.004. JUDICIAL AUTHORITY. A judge of the business
171	171	court has all powers, duties, immunities, and privileges of a
172	172	district judge.
173	173	Sec. 24A.005. INITIAL FILING; REMOVAL AND REMAND; TRANSFER
174	174	AND DISMISSAL. (a) An action in the jurisdiction of the business
175	175	court may be filed in the business court. If the business court
176	176	does not have subject matter jurisdiction of the action, or part of
177	177	the action, the court shall, at the option of the party filing the
178	178	action:
179	179	(1) transfer the action or part of the action to an
180	180	appropriate district court; or
181	181	(2) dismiss the action or part of the action without
182	182	prejudice to the party's rights.
183	183	(b) If an action or part of an action is to be transferred
184	184	under Subsection (a)(1), and the action or part of the action could
185	185	have been filed in more than one county, the party filing the action
186	186	may select the county to which the action or part of the action is
187	187	transferred.
188	188	(c) A party to an action filed in a district court or county
189	189	court at law that is in the subject matter jurisdiction of the
190	190	business court may remove the action to the business court. If the
191	191	business court does not have jurisdiction of the action or part of
192	192	the action, the business court shall remand the action, or the part
193	193	in which the business court does not have jurisdiction, to the court
194	194	from which the action was removed.
195	195	(d) Removal of a case to the business court is not subject to
196	196	the statutes or rules governing the due order of pleading.
197	197	(e) Removal of a case does not waive a defect in venue or
198	198	constitute an appearance to determine personal jurisdiction.
199	199	Sec. 24A.006. APPEALS. (a) Notwithstanding any other law
200	200	and except as provided by Subsection (b) and in instances when the
201	201	supreme court has concurrent or exclusive jurisdiction, the
202	202	Fifteenth Court of Appeals has exclusive jurisdiction over an
203	203	appeal from an order or judgment of the business court or an
204	204	original proceeding related to an action or order of the business
205	205	court.
206	206	(b) If the Fifteenth Court of Appeals is not created, an
207	207	appeal from an order or judgment of the business court or an
208	208	original proceeding related to an action or order of the business
209	209	court shall be filed in the intermediate court of appeals with
210	210	jurisdiction of the appeal under Section 22.220.
211	211	(c) The procedure governing an appeal or original
212	212	proceeding from the business court is the same as the procedure for
213	213	an appeal or original proceeding from a district court.
214	214	Sec. 24A.007. QUALIFICATIONS OF JUDGE. A judge of the
215	215	business court must be:
216	216	(1) at least 35 years of age;
217	217	(2) a United States citizen;
218	218	(3) a resident of this state for at least two years
219	219	before appointment; and
220	220	(4) a licensed attorney in this state and have 10 or
221	221	more years of experience in:
222	222	(A) practicing complex civil business
223	223	litigation;
224	224	(B) practicing business transaction law;
225	225	(C) teaching courses in complex civil business
226	226	litigation or complex business transaction law at an accredited law
227	227	school in this state;
228	228	(D) serving as a judge of a court in this state
229	229	with civil jurisdiction; or
230	230	(E) any combination of experience described by
231	231	Paragraphs (A)-(D).
232	232	Sec. 24A.008. COMPOSITION OF COURT. (a) The governor, with
233	233	the advice and consent of the senate, shall appoint seven judges to
234	234	serve the business court.
235	235	(b) A judge of the business court may be reappointed.
236	236	(c) The governor may not appoint more than three judges who
237	237	reside in the same county.
238	238	Sec. 24A.009. TERMS OF OFFICE. A judge of the business
239	239	court serves a two-year term.
240	240	Sec. 24A.010. VACANCY. If a vacancy occurs on the business
241	241	court, the governor, with the advice and consent of the senate,
242	242	shall appoint, in the same manner as the original appointment,
243	243	another person to serve for the remainder of the unexpired term.
244	244	Sec. 24A.011. JUDGE'S SALARY. (a) A judge of the business
245	245	court shall be paid a total annual salary from the state that is the
246	246	sum of:
247	247	(1) the salary paid to a district judge by the state
248	248	under Section 659.012; and
249	249	(2) the maximum amount of county contributions and
250	250	supplements allowed by law to be paid to a district judge under
251	251	Section 659.012.
252	252	(b) The salary shall be paid in equal monthly installments.
253	253	Sec. 24A.012. REMOVAL; DISQUALIFICATION AND RECUSAL. (a)
254	254	A judge of the business court may be removed from office in the same
255	255	manner and for the same reasons as a district judge.
256	256	(b) A judge of the business court is disqualified and
257	257	subject to mandatory recusal for the same reasons a district judge
258	258	is subject to disqualification or recusal in a pending case.
259	259	Disqualification or recusal of a judge of the business court shall
260	260	be governed by the same procedure as disqualification or recusal of
261	261	a district judge.
262	262	Sec. 24A.013. PRIVATE PRACTICE OF LAW. A judge of the
263	263	business court shall diligently discharge the duties of the office
264	264	on a full-time basis and may not engage in the private practice of
265	265	law.
266	266	Sec. 24A.014. VISITING JUDGE. (a) A retired or former
267	267	judge or justice may be assigned as a visiting judge of the business
268	268	court by the chief justice of the supreme court. A visiting judge
269	269	of the business court is subject to objection, disqualification, or
270	270	recusal in the same manner as a retired or former judge or justice
271	271	is subject to objection, disqualification, or recusal if appointed
272	272	as a visiting district judge.
273	273	(b) Before accepting an assignment as a visiting judge of
274	274	the business court, a retired or former judge or justice shall take
275	275	the constitutional oath of office required of appointed officers of
276	276	this state and file the oath with the supreme court.
277	277	Sec. 24A.015. JURY PRACTICE AND PROCEDURE. (a) A party in
278	278	an action pending in the business court has the right to a trial by
279	279	jury when required by the constitution.
280	280	(b) A jury trial shall be held in a county in which venue
281	281	would be found under Section 15.002, Civil Practice and Remedies
282	282	Code.
283	283	(c) Subject to Subsection (b), a jury trial in a case
284	284	removed to the business court shall be held in the county in which
285	285	the action was originally filed.
286	286	(d) Subject to Subsection (b), a jury trial in a case filed
287	287	initially in the business court shall be held in any county in which
288	288	it could have been filed under Section 15.002, Civil Practice and
289	289	Remedies Code, as chosen by the plaintiff.
290	290	(e) The parties and the judge of the business court may
291	291	agree to hold the jury trial in any other county. A party may not be
292	292	required to agree to hold the jury trial in a different county.
293	293	(f) The drawing of jury panels, selection of jurors, and
294	294	other jury-related practice and procedure in the business court
295	295	shall be the same as for the district court in the county in which
296	296	the trial is held.
297	297	(g) Practice, procedure, rules of evidence, issuance of
298	298	process and writs, and all other matters pertaining to the conduct
299	299	of trials, hearings, and other business in the business court are
300	300	governed by the laws and rules prescribed for district courts,
301	301	unless otherwise provided by this chapter.
302	302	Sec. 24A.016. WRITTEN OPINIONS. To facilitate the
303	303	establishment of a coherent body of law, a judge of the business
304	304	court shall issue a written opinion when deciding issues of law by
305	305	order or judgment, unless:
306	306	(1) the court has a well-developed body of law on the
307	307	issue;
308	308	(2) the court is applying the court's precedent on the
309	309	issue; and
310	310	(3) another opinion on the issue will not
311	311	significantly contribute to the development of the law.
312	312	Sec. 24A.017. COURT LOCATION; STAFFING. (a) The business
313	313	court shall have a clerk, whose office shall be located in Travis
314	314	County in facilities provided by this state. The clerk shall:
315	315	(1) receive all filings in the business court; and
316	316	(2) fulfill the legal and administrative functions of
317	317	a district clerk and an appellate court clerk.
318	318	(b) Each judge of the business court shall maintain chambers
319	319	in the county seat of the judge's county of residence in facilities
320	320	provided by this state.
321	321	(c) Subject to Section 24A.015, the business court, or any
322	322	judge of the business court, may hold court at any location in this
323	323	state, as the court determines is necessary or convenient for a
324	324	particular civil action.
325	325	(d) The business court shall use the most advanced
326	326	technology feasible when necessary and appropriate to facilitate
327	327	expeditious proceedings in matters brought before the court. As
328	328	determined by the business court, counsel and parties may appear
329	329	before the business court by means of Internet-based or other
330	330	technological devices rather than in person.
331	331	(e) In a county in which the business court sits, the
332	332	sheriff shall in person or by deputy attend the business court as
333	333	required by the court. The sheriff or deputy is entitled to be
334	334	reimbursed by the state for the cost of attending court.
335	335	(f) Subject to any limitations provided by the General
336	336	Appropriations Act, the business court may appoint personnel
337	337	necessary for the operation of the court, including:
338	338	(1) the clerk of the court;
339	339	(2) staff attorneys for the court;
340	340	(3) staff attorneys for each judge of the business
341	341	court;
342	342	(4) court coordinators; and
343	343	(5) administrative assistants.
344	344	(g) The court officials shall perform the duties and
345	345	responsibilities of their offices and are entitled to the
346	346	compensation, fees, and allowances prescribed by law for the
347	347	offices.
348	348	Sec. 24A.018. FEES. The business court shall provide rates
349	349	for fees associated with filings and actions in the business court.
350	350	The fees shall be set at a sufficient amount to cover the costs of
351	351	administering the provisions of this chapter, taking into account
352	352	fee waivers in the interest of justice.
353	353	Sec. 24A.019. SEAL. The seal of the business court is the
354	354	same as that provided by law for a district court except that the
355	355	seal must contain the name "The Business Court of Texas."
356	356	Sec. 24A.020. RULES. (a) The supreme court shall
357	357	promulgate rules of civil procedure as the court determines
358	358	necessary, including rules providing for:
359	359	(1) the timely and efficient removal and remand of
360	360	cases to and from the business court; and
361	361	(2) the assignment of cases to judges of the business
362	362	court.
363	363	(b) The business court may adopt rules of practice and
364	364	procedure, subject to any approval required by the supreme court or
365	365	statute.
366	366	SECTION 2. Except as otherwise provided by this Act, the
367	367	business court for the Business Court Judicial District is created
368	368	January 1, 2025.
369	369	SECTION 3. As soon as practicable after the effective date
370	370	of this Act, the governor shall appoint judges to the business court
371	371	for the Business Court Judicial District, as required by Section
372	372	24A.008, Government Code, as added by this Act.
373	373	SECTION 4. (a) Notwithstanding Chapter 24A, Government
374	374	Code, as added by this Act, the business court for the Business
375	375	Court Judicial District is not created unless the legislature makes
376	376	a specific appropriation of money for that purpose. For purposes of
377	377	this subsection, a specific appropriation is an appropriation
378	378	identifying the business court or an Act of the 88th Legislature,
379	379	Regular Session, 2023, relating to the creation of a specialty
380	380	trial court to hear certain cases or of the business court.
381	381	(b) Notwithstanding Section 24A.006(a), Government Code, as
382	382	added by this Act, a court of appeals retains the jurisdiction the
383	383	court had on December 31, 2024, if the business court for the
384	384	Business Court Judicial District is not created as a result of
385	385	Subsection (a) of this section.
386	386	SECTION 5. The changes in law made by this Act apply to
387	387	civil actions commenced on or after January 1, 2025.
388	388	SECTION 6. This Act takes effect September 1, 2023.