A new bill proposed in Texas could charge transgender people with a state felony if they lie about their biological sex assigned at birth … and two lawmakers are defending the harsh punishment.

Texas State Reps. Steve Toth and Nate Schatzline joined us on “TMZ Live” Tuesday and we asked them about the proposed bill that would add a new form of fraud related to gender identity.

As Toth and Schatzline explain, the bill — Texas House Bill 3817 — says a transgender Texan would commit “gender identity fraud” if they lie on state records or to employers about their biological sex … and they would be charged with a state felony, which is punishable by up to two years behind bars.

That would mean Caitlyn Jenner would be in violation of the law if she filled out a state document in Texas and said she was female. We asked Toth and Schatzline about this scenario — would they really throw Caitlyn in jail ?!? — and challenged them about why such a bill is needed in Texas.

Frankly, there are not a lot of people this would apply to … based on the explanations these lawmakers give us.

Toth made it a point to say the bill does NOT make being transgender against the law, but they both told us being trans is a mental illness.