According to the Legislative Budget Board (LBB), no significant fiscal impact on the State is anticipated from the implementation of SB 647. The review assumes that any administrative costs associated with complying with the bill's provisions — such as notifying affected parties, requesting additional documentation, and processing potentially fraudulent filings — could be absorbed within the existing resources of relevant state agencies, including the Office of Court Administration.

Similarly, no significant fiscal impact on local governments is expected. Even though county and municipal clerks will have new responsibilities under the bill, such as issuing notices and possibly refusing to file certain documents, these tasks are considered manageable within their current staffing and budget levels. The added duties are seen as procedural extensions of clerks' current roles rather than new functions requiring substantial investment or staffing increases.

In sum, SB 647 is not expected to necessitate new funding appropriations or create new burdensome costs for either the state government or local entities. It is designed to enhance fraud protections with minimal fiscal disruption.

SB 647 aims to protect individuals from fraudulent filings that could cloud or jeopardize ownership of real or personal property. It authorizes clerks to flag suspicious documents, notify parties, demand additional proof, and — under certain conditions — refuse to record documents they reasonably suspect to be fraudulent. It also establishes rebuttable presumptions of fraud and creates a mechanism for legitimate filers to submit evidence to overcome those presumptions.

While the bill’s goal is commendable — safeguarding property rights and discouraging fraud — serious concerns about its unintended consequences are why Texas Policy Research recommends that lawmakers vote NO on SB 647 unless amended as described below.

First and foremost, SB 647 risks imposing new burdens on lawful individuals and businesses engaged in real estate, financial, or personal property transactions. By empowering clerks to demand additional documentation without strong limitations, the bill could delay legitimate filings, increase transactional costs, and introduce significant uncertainty into the filing process. This is especially troubling for small businesses, self-represented individuals, and rural property owners, who may lack ready access to legal resources to navigate these new hurdles.

Second, the bill presents substantial due process concerns. Clerks — who are administrative officials, not judges — would be granted discretionary authority to effectively block the filing of property documents based on a subjective suspicion of fraud. Yet property rights are among the most fundamental rights protected under the Texas and U.S. Constitutions. Interfering with a person's ability to record or assert property rights without guaranteed, immediate judicial review creates an unacceptable risk of violating basic due process protections. A person should not have their access to the property system curtailed by administrative judgment without a formal, timely avenue for judicial oversight.

Third, the bill raises a significant risk of unintended consequences. Clerks may understandably become overly cautious to avoid liability or public criticism, resulting in legitimate filings being delayed, rejected, or forced through unnecessary hoops. Over time, this defensive behavior could erode confidence in Texas’s property recording system — a key pillar of economic stability, especially in a fast-growing state. Without clear, objective standards, a broad variety of documents — from ordinary deeds to home equity liens to small business contracts — could become entangled in disputes over "proof" and "fraud" where none truly exists.

Importantly, the bill does expand the scope of government discretion over private property transactions, but does not grow the size of government or impose significant taxpayer burdens. The fiscal impact is neutral. However, the increased regulatory friction on honest individuals and businesses is substantial enough to outweigh the bill’s benefits without appropriate amendments.

Suggested amendments:

• Require mandatory judicial review within a short, defined period (e.g., five business days) before a document can be formally rejected based on fraud suspicions;
• Establish clear and objective standards for clerks to apply when evaluating documents for fraud.
• Include a safe harbor provision ensuring that clerks acting in good faith cannot be penalized for filing legitimate but suspicious documents, discouraging over-cautious behavior.

With these amendments, SB 647 could fulfill its fraud-prevention mission while fully respecting private property rights, maintaining due process, and protecting legitimate business and personal transactions across Texas.

• Individual Liberty: The bill protects individuals by preventing fraudulent liens and fake court documents from harming their property rights. That strengthens individual liberty — no one should have their property encumbered based on a fake filing. However, the bill also allows clerks to block legitimate documents based on their personal judgment without immediate judicial review, creating a risk that individuals could be wrongly prevented from exercising their property rights. That’s a real concern for liberty.
• Personal Responsibility: The bill reinforces the idea that individuals (or businesses) submitting documents to public records must act honestly and provide evidence supporting their filings when asked. It places responsibility squarely on the filer to verify the legitimacy of their actions. This promotes ethical behavior and accountability.
• Free Enterprise: The bill could make it harder for businesses, especially small businesses, title companies, and real estate professionals, to quickly and efficiently record property transactions. Added procedural hurdles and delays can frustrate economic activity and increase costs. Even honest actors could get caught in new bureaucratic steps, harming free market efficiency and predictability.
• Private Property Rights: Protecting property owners from fraudulent encumbrances strongly supports private property rights. Preventing fake liens and forged court judgments is critical. However, if a clerk improperly refuses to file a legitimate document, even temporarily, that directly interferes with the property owner’s right to control, transfer, or protect their property. Without a guaranteed quick judicial review, that poses a serious caveat to what would otherwise be a clear positive.
• Limited Government: The bill modestly expands government authority by giving clerks new discretionary powers without immediate court oversight. It turns clerks — administrative officials — into gatekeepers for private property filings. While intended to fight fraud, this enlargement of discretionary government power risks eroding the principle that government should act minimally and only with appropriate checks and balances.

• HB 4558 (Same As)