- Recent anti-business decisions by Delaware courts have caused businesses, such as those led by Elon Musk, to leave the state
- Legislation signed by Governor Abbott hopes to capitalize on Delaware’s increasingly hostile climate for business by making Texas “the undisputed champion for doing business in the United States of America”
- A newly created Texas Stock Exchange hopes to begin trading next year, and the New York Stock Exchange launched NYSE Texas in March
Three significant pieces of legislation that Governor Greg Abbott’s office says will “boost Texas’ capital market environment and cement Texas as the Best State for Business” were signed into law at a signing ceremony Wednesday. The event featured prominent Republican leaders from Texas government as well as representatives from the Texas business community.
The bills signed into law by Governor Abbott at the ceremony were:
- Senate Bill 29 by State Senator Bryan Hughes and State Representative Morgan Meyer, which makes changes to Texas’ corporate governance laws that are designed to make Texas a more attractive jurisdiction in which to form a business.
- Senate Bill 1058 by State Senator Tan Parker and State Representative Giovanni Capriglione, which exempts certain payments made to a stock exchange operating in Texas from counting towards the stock exchange’s state franchise tax calculation
- House Joint Resolution 4 by State Representative Morgan Meyer and State Senator Tan Parker, which proposed an amendment to the Texas Constitution that will ban the imposition of an occupation tax on a Texas stock exchange and taxes on securities exchanges conducted by a Texas stock exchange
“Texas is the reigning and undisputed champion for doing business in the United States of America,” said Governor Abbott. “There is a difference between becoming a champion and repeating as a national champion year after year. To remain at the highest level requires constant innovation and improvement, and that is what we constantly work at to keep Texas as the best business climate in America. Senate Bill 29 provides business decision makers the certainty that sound business judgments made in the best interest of shareholders will not be second-guessed by courts. Business decisions are to be made by the elected officers and shareholders, not by unelected judges. These three laws will solidify our status as the best state for doing business for many years to come.”
“Texas is globally renowned for innovation and economic opportunities, and with these new measures, we are solidifying our place as America’s premier business destination,” said Texas House Speaker Burrows. “This session, the Texas Legislature worked to bolster our state’s business-friendly reputation by providing certainty for businesses and investors so that every Texan feels the benefit of our thriving economy. I look forward to seeing these new laws attract more investments and opportunities to Texas and thank Governor Abbott, Lieutenant Governor Patrick and my colleagues in the legislature for securing a promising financial future for Texans.”
Although Delaware has long been one of the most popular jurisdictions to incorporate a business, that has changed in recent years with rulings from Delaware’s Court of Chancery, the state’s business court, that have been viewed as creating an unfavorable business climate there. Most notably, a decision from a Delaware court that was hostile to Elon Musk spurred him to move his businesses out of Delaware.
In a tweet on February 14, 2024, Musk wrote, “SpaceX has moved its state of incorporation from Delaware to Texas! If your company is still incorporated in Delaware, I recommend moving to another state as soon as possible.”
James Lee, the Founder and CEO of the newly created Texas Stock Exchange, was one of the business leaders who spoke at the signing ceremony.
“Thanks to the dedication of our state leadership and legislators, Texas will now be the No. 1 choice for corporate registrations and relocations, as well as the premier destination for securities listings,” said Mr. Lee. “Our state is truly becoming the center of gravity for American capitalism.”
The Texas Stock Exchange hopes to begin trading early next year. In March, the New York Stock Exchange launched NYSE Texas, billed as the first securities exchange to open in Texas. Nasdaq announced earlier this year that it plans to open a regional headquarters in Dallas.
