Enrolled Bill Summary

House Bill 4635	House Author:  Guillen
Effective:  9-1-23	Senate Sponsor:  Flores et al.

            House Bill 4635, the Texas Racketeering Act, sets out provisions relating to civil actions and remedies and criminal offenses for conduct that constitutes organized crime, racketeering, or unlawful debt collection and the filing of RICO liens with respect to such civil actions or criminal offenses. The bill amends the Civil Practice and Remedies Code, Code of Criminal Procedure, Penal Code, and Property Code to do the following:

·        create a second degree felony offense for the following conduct:

o   use of proceeds from racketeering or unlawful debt collection for acquiring title to, or any right, interest, or equity in, real property or in the establishment or operation of any enterprise;

o   acquisition of an interest in real property or control of an enterprise through racketeering or unlawful debt collection; and

o   conducting or participating in an enterprise as an employee or associate through a pattern of racketeering or the collection of an unlawful debt;

·        provide for a court to impose certain fines for a person convicted of such an offense; and

·        expand the conduct that constitutes engaging in organized criminal activity to include certain conduct involving unlawful possession of controlled substances and dangerous drugs with intent to deliver as part of, or contributing to, a criminal street gang.

The bill sets the statute of limitations for an offense created by the bill at five years from the date of the commission of the offense with allowance for an extension under certain circumstances.

House Bill 4635 provides for civil remedies and enforcement related to racketeering and unlawful debt collection. Among other provisions, the bill does the following:

·        provides for civil investigative authority for the Office of the Attorney General (OAG) or a local prosecutor with respect to a racketeering investigation, including setting out the required contents of each civil investigative demand;

·        provides for a person who has been served, or in the case of a demand for a product of discovery the person from whom the discovery was obtained, to file a petition for an order modifying or setting aside the demand;

·        creates a Class A misdemeanor offense for a person who alters or falsifies any documentary material or otherwise provides inaccurate information with respect to the investigative demand;

·        excepts certain information related to such an investigation from disclosure under state public information law and from disclosure, discovery, or subpoena;

·        provides for a district court to enjoin conduct constituting a felony offense created by the bill;

·        makes all property, real or personal, including money, used in the course of conduct constituting a felony offense created by the bill subject to civil forfeiture to the state;

·        provides for a civil action for the forfeiture process and for the state's seizure and disposal of property and the disposition of funds obtained through forfeiture actions;

·        provides for an aggrieved person to bring an action for civil remedies as authorized under the bill;

·        authorizes the OAG to bring an action against a person who engages in conduct constituting a felony offense created by the bill;

·        provides for the OAG or a local prosecutor to expedite an action brought under the bill's provisions; and

·        prohibits a remedy provided by the bill from being assessed against certain property subject to seizure and forfeiture as contraband.

The bill also provides for required notice and cooperation by the OAG regarding a pending criminal investigation or prosecution with a local prosecutor who appears to have primary jurisdiction of the criminal prosecution of a target of the investigation, including the abatement of an action brought by the OAG if the local prosecutor determines that the action would interfere with an ongoing criminal investigation or prosecution and makes a request in writing.

House Bill 4635 provides for an investigative agency, the OAG, or a local prosecutor, as appliable, to file a RICO lien notice with respect to conduct constituting a civil action or felony offense created by the bill. Among other provisions, the bill does the following:

·        provides for the format, duration, expiration, renewal, and termination of the notice;

·        provides for a local prosecutor to consent before the OAG may file a RICO lien; and

·        creates a Class B misdemeanor offense for a trustee who acquires knowledge that a RICO lien notice has been filed against a person for whom the trustee holds legal or record title to real property and does not immediately furnish required information to the appropriate investigative agency.