According to the Legislative Budget Board (LBB), SB 1137 would have no significant fiscal implications for the State. The bill would create a new Class B misdemeanor offense by prohibiting group home consultants from referring potential residents to unlicensed or unpermitted group homes under most circumstances. However, enforcement of this new offense, including any resultant prosecutions or regulatory actions, is expected to have a minimal financial impact.

The Office of Court Administration (OCA) does not anticipate any notable fiscal impact on the state court system due to the new offense, suggesting that any additional cases would be absorbed within existing judicial workloads. Similarly, the Health and Human Services Commission (HHSC) indicated that complaints about group home consultants could be managed with current agency resources without requiring new appropriations or staffing.

Regarding correctional systems, it is assumed that any impact on state incarceration populations or demands for correctional resources would also be insignificant. Furthermore, local governments are not expected to incur significant costs related to enforcement, prosecution, or supervision stemming from the bill.

In short, the bill is structured in a way that promotes greater oversight and consumer protection without imposing meaningful new financial burdens on state or local governments.

SB 1137 seeks to address a real and important issue: the unsafe placement of vulnerable Texans, such as the elderly and disabled, into unregulated or dangerous group homes. It promotes individual liberty and personal responsibility by requiring group home consultants to verify the licensing status of facilities before making referrals and by mandating disclosure of known complaints when unlicensed facilities are involved. These transparency requirements are designed to prevent abuse without broadly interfering with individual choice.

Importantly, SB 1137 does not significantly grow the size or scope of government. It does not create any new agencies or programs, and both the Health and Human Services Commission and the Office of Court Administration anticipate no significant fiscal impact on the state. As such, the bill does not increase the burden on taxpayers.

However, while the bill’s goals are worthy, it does impose a new criminal penalty (Class B misdemeanor) on private individuals (consultants) for failing to comply with these new requirements. This raises legitimate concerns about the regulatory burden on private businesses and the risk of over-criminalization for individuals who may act in good faith. Even well-intentioned consultants could face serious legal consequences for minor mistakes or misunderstandings, which could discourage participation in the referral industry and limit housing options for those in need.

Given these factors, Texas Policy Research does recommend that lawmakers vote YES on SB 1137, but also suggests they consider amendments as described below to strengthen and better align it with core liberty principles. Specifically, we recommend:

• Making first-time violations subject to a civil fine or administrative penalty, not immediate criminal prosecution;
• Reserving criminal penalties for repeat or willful misconduct;
• Providing a good-faith safe harbor for consultants who diligently attempt to comply.

These amendments would preserve the bill’s important consumer protections while limiting unnecessary government intrusion into private business practices and ensuring free enterprise is not chilled by overbroad legal risk.

• Individual Liberty: The bill protects vulnerable individuals (especially the elderly and disabled) from being placed into unsafe, unlicensed group homes without proper warning. It strengthens individuals' rights to make informed decisions by requiring disclosure of known complaints. This advances individual liberty by helping people exercise more meaningful, informed choices. However, it also places legal restrictions on group home consultants, limiting their ability to refer residents freely. While the intent is protective, this slightly restricts liberty for those operating in the market by criminalizing certain private business actions.
• Personal Responsibility: The bill reinforces the principle that individuals and businesses should be responsible for the consequences of their actions. Group home consultants would be legally required to act with due diligence and honesty when making referrals, and group home owners must continue screening employees through criminal background checks. This promotes a culture of accountability.
• Free Enterprise: The bill imposes new compliance obligations and creates criminal penalties for private consultants. This could discourage entrepreneurial activity by adding legal risks and administrative burdens to what was previously a more open market. Even though it targets bad actors, it places new limits on how consultants can operate, raising concerns about overregulating a private industry. A narrowly written amendment (such as replacing first-time criminal charges with civil penalties) would greatly reduce this tension and strengthen respect for free enterprise.
• Private Property Rights: The bill does not directly impact private property rights. It regulates business practices related to referrals but does not seize, regulate, or restrict ownership or use of property. Therefore, its effect on this principle is neutral.
• Limited Government: The bill does not expand government size, staffing, or appropriations. Enforcement would be handled within existing agencies and resources. However, creating a new criminal offense where civil penalties could suffice does raise limited government concerns. Expanding criminal law always needs to be weighed carefully because it increases the state’s enforcement power over private individuals. Adopting a civil penalty-first approach would better align the bill with limited government ideals by addressing misconduct without immediately criminalizing it.