HB4996

Regular Session

Relating to increasing the criminal penalty for the offense of refusal to execute the release of a fraudulent lien or claim.

LowStandard timeline

Low Cost

Effective:2025-06-20

Enforcing Agencies

Local District Attorneys • Local Law Enforcement Agencies

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: June 20, 2025 (Immediate effect due to supermajority vote).
Compliance Deadline: Immediate. The enhanced penalties apply to any refusal to release a lien occurring on or after this date, even if the lien was filed previously.
Agency Rulemaking: None. This is a Penal Code amendment enforced by local prosecutors. There will be no regulatory grace period or agency guidance; the courts will define enforcement through case law.

Immediate Action Plan

1. Audit Active Disputes: Immediately review all pending lien release demands. If any involve a public servant, prioritize them for legal review today.
2. Update Intake Scripts: Modify customer service scripts and intake forms to ask or flag if a property owner is a government employee/public servant.
3. Suspend Auto-Denials: Disable any automated systems that generate refusal letters for lien disputes until a human review process is inserted.
4. Verify Vendor Protocols: Send a directive to all third-party lien services instructing them to escalate all release demands to your legal department immediately.

Operational Changes Required

Contracts

Third-Party Lien Vendors: Review Master Services Agreements (MSAs) with vendors who file liens on your behalf. You must amend contracts to require immediate notification of any release demands.
Indemnification: Strengthen indemnity clauses. If a vendor’s automated system refuses a release without your knowledge, you must ensure they bear the liability, though this does not shield officers from criminal charges.

Hiring/Training

Dispute Resolution Teams: Staff processing lien disputes must be trained to identify "Public Servant" status. They must be stripped of the authority to summarily deny a release demand if the claimant identifies as a government employee.
Escalation Protocols: Establish a mandatory escalation channel. Any claim asserting a lien is fraudulent *and* involving a public servant must go directly to the General Counsel or Chief Compliance Officer.

Reporting & Record-Keeping

Substantiation Files: You must maintain a digitized "source of truth" (contract, invoice, judgment) for every active lien. If you cannot produce the source document immediately upon a challenge, you must release the lien.
Refusal Logs: If you refuse to release a lien, you must document the specific legal basis (e.g., "Valid debt under Contract X, Section Y"). This documentation is your primary defense against a claim of fraudulent intent.

Fees & Costs

Operational Costs: Minimal administrative increase for enhanced screening.
Liability Risk: High. Defense costs for a third-degree felony charge are substantial and generally excluded from standard corporate insurance policies.

Strategic Ambiguities & Considerations

Definition of "Public Servant": The statute relies on Texas Penal Code § 1.07, which defines "public servant" broadly. It includes not only elected officials and judges but also employees of *any* government agency, jurors, and arbitrators. Business Logic: Treat *any* government employee as a protected class under this statute.
The "Knowledge" Standard: The felony enhancement triggers if the actor "knows" the owner is a public servant. Prosecutors will likely argue that receipt of a certified letter stating "I am a public servant" constitutes knowledge. Business Logic: Ignorance is not a defense if the correspondence is in your possession.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsCrimes Crimes--against Property Property Interests Property Interests--mortgages & Liens Property Interests--real Property Fraud

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

H.B. 4996

By: Dyson

Trade, Workforce & Economic Development

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The bill author has informed the committee that, due to their high-profile positions, public servants are highly susceptible to having fraudulent liens filed against them by citizens who are unsatisfied with a decision made by the public servant. When public servants such as judges, prosecutors, legislators, school officials, and corrections officers are not protected while making decisions, fear of retaliation against those decisions can corrupt the deliberative process. H.B. 4996 seeks to deter this abuse of public servants by increasing the penalty for refusal to execute the release of a fraudulent lien or claim if the owner of the real or personal property subject to the fraudulent lien is a person the actor knows is a public servant.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill expressly does one or more of the following: creates a criminal offense, increases the punishment for an existing criminal offense or category of offenses, or changes the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 4996 amends the Penal Code to increase the penalty for refusal to execute the release of a fraudulent lien or claim from a Class A misdemeanor to a third degree felony if the owner of the real or personal property subject to the fraudulent lien or claim is a person the actor knows is a public servant. The bill applies only to an offense committed on or after the bill's effective date. An offense committed before the bill's effective date is governed by the law in effect on the date the offense was committed, and the former law is continued in effect for that purpose. For these purposes, an offense was committed before the bill's effective date if any element of the offense occurred before that date.

EFFECTIVE DATE

September 1, 2025.

House Authors

Rep. Paul DysonRepublican · Primary Author

Joint Authors

John Lujan (R)

Senate Sponsor

Sen. Peter FloresRepublican · Primary Sponsor

Bill Text(with markup)

H.B. No. 4996

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to increasing the criminal penalty for the offense of
	refusal to execute the release of a fraudulent lien or claim.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 32.49(c), Penal Code, is amended to read
	as follows:
	(c) An offense under this section is a Class A misdemeanor,
	except that the offense is a felony of the third degree if the owner
	of the real or personal property subject to the fraudulent lien or
	claim is a person the actor knows is a public servant.
	SECTION 2. The change in law made by this Act applies only
	to an offense committed on or after the effective date of this Act.
	An offense committed before the effective date of this Act is
	governed by the law in effect on the date the offense was committed,
	and the former law is continued in effect for that purpose. For
	purposes of this section, an offense was committed before the
	effective date of this Act if any element of the offense occurred
	before that date.
	SECTION 3. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


April 22, 2025

TO:	Honorable Angie Chen Button, Chair, House Committee on Trade, Workforce & Economic Development

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB4996 by Dyson (Relating to increasing the criminal penalty for the offense of refusal to execute the release of a fraudulent lien or claim.), As Introduced

No significant fiscal implication to the State is anticipated.

The bill would increase the criminal penalty for the offense of refusal to execute release of fraudulent lien or claim from a Class A misdemeanor to a third degree felony in cases in which the owner of the real or personal property is a public servant.

It is assumed that any impact on state correctional populations or on the demand for state correctional resources would not be significant.

Local Government Impact

It is assumed that any fiscal impact to units of local government associated with enforcement, prosecution, supervision, or confinement would not be significant.

Source Agencies:

212 Office of Court Administration, Texas Judicial Council, 304 Comptroller of Public Accounts

LBB Staff:

JMc, RStu, AMr, MGol

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Frequently Asked Questions

Common questions about HB4996

What does Texas HB4996 do?

Effective immediately, Texas has elevated the refusal to release a fraudulent lien against a public servant from a misdemeanor to a Third Degree Felony. While intended to curb "paper terrorism" against judges, this law exposes construction firms, HOAs, and lenders to severe criminal liability (2–10 years imprisonment) if they mishandle lien disputes involving government employees. Organizations must immediately implement "stop-loss" protocols for lien release demands to ensure no refusal is issued without legal review.

Who authored HB4996?

HB4996 was authored by Texas Representative Paul Dyson during the Regular Session.

When was HB4996 signed into law?

HB4996 was signed into law by Governor Greg Abbott on June 20, 2025.

Which agencies enforce HB4996?

HB4996 is enforced by Local District Attorneys and Local Law Enforcement Agencies.

How urgent is compliance with HB4996?

The compliance urgency for HB4996 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB4996?

The cost impact of HB4996 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does HB4996 address?

HB4996 addresses topics including crimes, crimes--against property, property interests, property interests--mortgages & liens and property interests--real property.

Legislative data provided by LegiScanLast updated: November 25, 2025

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