According to the Legislative Budget Board (LBB), the bill is not expected to result in a significant fiscal impact on the State of Texas. Agencies involved, including the Health and Human Services Commission and the Office of Court Administration, are anticipated to absorb any implementation costs within their existing appropriations and operational capacity.

This assessment suggests that the requirements introduced in the bill, such as criminal background checks for group home employees and enforcement of penalties for unlawful referrals, can be implemented using current administrative and oversight structures. The bill does not create new state-funded programs, nor does it mandate new appropriations or major regulatory expansions that would incur substantial administrative costs.

For local governments, the fiscal impact is also expected to be negligible. While the bill introduces Class A and B misdemeanors for certain violations, enforcement and prosecution of these offenses are not projected to create a meaningful increase in caseloads for local law enforcement or judicial systems. Therefore, SB 1777 is considered fiscally neutral across both state and local levels.

Texas Policy Research recommends that lawmakers vote YES on SB 1777 for its targeted and fiscally responsible approach to addressing unethical referral practices in the group home industry. The bill prohibits health care providers and affiliated staff from accepting payment for referring individuals to unlicensed group homes—a practice that can undermine trust and expose vulnerable populations to unsafe environments. Additionally, it mandates that group home operators conduct criminal background checks and bars them from employing individuals convicted of serious crimes. These measures enhance individual protections without creating unnecessary bureaucracy​​.

Importantly, SB 1777 does not grow the size or scope of government. It utilizes existing enforcement and administrative frameworks without creating new agencies or granting additional rulemaking authority. It also does not increase the burden on taxpayers. The Legislative Budget Board has confirmed that the bill has no significant fiscal impact and that any associated costs can be absorbed within current state resources.

While the bill does impose a modest increase in regulatory requirements on certain private actors—specifically group home operators and referring health care professionals—those obligations are narrow and directly tied to enhancing safety and accountability. Legitimate providers already engaging in ethical practices will experience little additional burden. Rather than imposing broad regulations, the bill targets high-risk conduct with focused enforcement tools.

In sum, SB 1777 promotes personal responsibility, upholds patient trust, reinforces limited government principles, and safeguards vulnerable Texans—all without expanding government authority or taxpayer obligations. It is a measured, liberty-aligned proposal that merits affirmative legislative support.

• Individual Liberty: The bill promotes individual liberty by protecting vulnerable Texans, such as those recovering from illness or with limited independence, from being steered into unsafe or unregulated group homes. By ensuring that referrals are made based on patient needs rather than financial incentives, the bill helps uphold an individual’s right to receive honest, unbiased medical guidance and to live in a secure, trustworthy environment.
• Personal Responsibility: The bill reinforces personal responsibility by holding group home operators and health care professionals accountable for their actions. Operators are responsible for screening their employees through background checks, and medical providers must avoid unethical referral practices. This ensures that those entrusted with the care and safety of others act with integrity and diligence.
• Free Enterprise: While the bill does impose modest compliance requirements, it actually supports healthy competition and fairness in the marketplace. By targeting unethical actors—those making referral decisions for profit or hiring high-risk employees—the bill protects responsible group home businesses that follow the rules. It prevents bad actors from gaining an unfair advantage and ensures consumers are not misled or harmed in the process.
• Private Property Rights: The bill does not interfere with property ownership or the right to operate a business. It allows group homes to continue functioning freely, provided they meet basic standards for safety and employee conduct. Owners still have broad discretion in running their businesses, but within a framework that ensures protection of residents’ well-being.
• Limited Government: The bill embodies limited government principles by addressing a specific harm with narrowly tailored rules. It does not create new agencies or sweeping regulations. Enforcement is left to existing state and local entities, and the bill avoids excessive red tape. It focuses government authority where it’s most needed—protecting people from fraud and abuse—without expanding bureaucracy.